Consolidated Financial statement Finaval Holding 2009 · TECHNIP KTI SpA is a process engineering company with more than thirty years’ experience in the design and construction

FINAVAL HOLDING SPA – Consolidated Financial Statements at December 31, 2009

Finaval Holding owns interests in companies

operating in areas on which we have decided

to focus through investing financial and, above all,

managerial resources.

We believe that the real drivers of the sustainable

growth of our business and finances are the corporate

values we share with our business associates.

Finaval Holding around the word:

Italy;

Croatia;

Spain;

Egipt;

Poland;

Canada;

Saudi Arabia;

Norway

Malta;

Madiera;

India;

Philippines;

Bulgaria.

FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2009

FINAVAL HOLDING SPA Pag. 3

TABLE OF CONTENTS

Management Report Mission

Group profile

Group structure

Highlights

Letter to shareholders

Macroeconomic environment

Results of operations

Financial position

Shipping sector IBusiness segments and markets in which the

Group operates

The fleet, business activities and maintenance

Quality, safety and the environment

Personel

Current investments

Coal logistic sector Higlights

Project forwarding sector Higlights

Engineering sector Higlights

Risk management

Relations with Group companies

Other informations

Consolidated Financial Statements 2009 Consolidater Financial Statements 2009

Basis of consolidation

Accounting standards and policies

Notes to the Consolidated Financial Statements



FINAVAL HOLDING SPA

Board of Directors Giovanni Fagioli – Chariman

in office until approvalo f the financial statements Angelo Sani

for the year ended at December 31, 2010

Board of Statutory Auditors Chairman

in office until approvalo f the financial statements Maria Altamura

for the year ended at December 31,2009 Statutory Auditors

Fabio Senese

Alessandra Carlino

Indipendent Auditors Deloitte & Touche S.p.a.

Issued Capital Euros 30,000,000.00 – fully paid-in

Registered office Via M. Bufalini 8 - 00161 ROME

Tel. +39 06 44067.1 - Fax +39 06 44067.777

Tax. code. 01922160351

Rome Business Register no. 1070911

www.finavalholding.com



MISSION

The Finaval Holding Group aims to become a leading player in the field of “energy” logistics in Europe.

Finaval Holding, via its holdings, can boast a long and established tradition in the shipping of crude and

chemical products and in engineering and logistics,having established partnerships with some of the world’s

most important international companies.

Finaval Holding’s objective is to create new value in order to meet the expectations of all its stakeholders.

This is to be achieved by continuously improving the cost effectiveness and quality of our products and

services for Finaval customers, by paying close attention to the needs of employees, by pursuing a sustainable

growth model that also takes account of the effects that Group activities have on the environment, and by

developing new and more efficient technologies.

The Finaval Group is counting on the huge pool of managerial and technical skills provided by its human

resources and on their ongoing development in order to reach these goals.



PROFILE OF THE GROUP TO WHICH THE FINAVAL SUB-GROUP BELONGS

SHIPPING SECTOR – FINAVAL

FINAVAL is a leading European shipper of energy products, as well as aspiring to become

a key logistics player.

The reliability of the Group’s ships, which are amongst the first in the world to use double

hulls, ensures greater protection of payloads and the environment. Highly qualified

crews, systematic maintenance and the use of the latest technologies and operating standards in

compliance with the most recent legislation, have enabled the Finaval Group to win recognition from leading

multinational oil companies and a well-deserved reputation for reliability, soundness and safety.

The underlying factors of the Finaval Group's current strength – including attention to varying customer needs,

a high-profile presence in strategic areas of cargo transport, provision of a high-quality range of services and

ongoing investment – have enabled the Group to enjoy a reputation for efficiency, professionalism and

convenience across the entire Italian and international shipping sector.

COAL LOGISTICS SECTOR – VIANN LOG/MBS

MBS - Mediterranean Bulk System N.V has been involved in the storage, transport

and logistics of coal for many years.

MBS operates at the Croatian port of Rijeka – Bakar and the Slovenian port of

Koper, where it has signed contracts relating to the unloading and storage of coal

allocated to Adriatic electricity power plants.

M.B.S./VIANN LOG's use of the dock facilities for more than ten years, including collaboration on ongoing

technical improvement, has enabled various industrial customers to benefit from services relating to transport

(including ships with deep draughts), product storage (including mixing and blending facilities), and reloading

and distribution regarding smaller ships.

POWER SECTOR – KTI MANAGEMENT/TECHNIP KTI

TECHNIP KTI SpA is a process engineering company with more than thirty years’

experience in the design and construction of chemical, petrochemical and refinery

plants. Its customers range from major oil companies to chemical, petrochemical,

pharmaceutical and food manufacturers, to whom TECHNIP KTI supplies a wide range of services including

consultation on feasibility studies, supply of turnkey plants, and management and maintenance, operating as

a sole project manager.

Development and continuous updating of its own technologies, together with a core group of process

specialists and more than 500 projects, have turned TECHNIP KTI into a leading global technology company.

POWER SECTOR – SITIE IMPIANTI INDUSTRIALI

Impianti Industriali SpA has been operating in the electrical installation and industrial

instrumentation sector since 1945, ranging from design to plant start-ups.



Incorporation of advanced technologies, respect for environmental protection requirements and adoption of

all possible measures to monitor and eliminate risk, are the guidelines for the company’s future development.

The company’s area of business, which has led it to operate at international level, primarily regarding

customers in the chemical, petrochemical, oil and energy sectors, has enabled it to acquire advanced

technologies and methods, especially in the fields of process control and power generation.

POWER SECTOR – LARAF

LARAF was incorporated in 2009 with a view to expanding the Group’s investment in

the provision of services to global energy sector players.

At December 31, 2009 the company was not yet operational.

PROJECT FORWARDING SECTOR – FINAVAL OFFSHORE SRL

Finaval Offshore is part of the Group’s strategy to develop high-tech, added-value

transport and logistics services.

This initiative, whilst featuring a high degree of business innovation, is based on

established traditions of the Finaval Holding Group, which has been developing its management skills and

business relations in this sector for over ten years.



GROUP STRUCTURE AT DECEMBER 31, 2009

The main corporate actions that took place during 2009 include:

• the incorporation of Laraf Srl, which is 30% owned by Finaval Holding SpA and has not yet started

operating as of December 31, 2009;

• the liquidation of Cabofin Srl, which is 50% owned by Finaval SpA.

Finaval Sub Group Details

FINAVAL HOLDINGFINAVAL HOLDING

VIANN LOG LdA

MBS Nv

50% 75%

100%KTI M. SpA

76%

Coal Logistics Shipping

TECHNIP KTI SpA

75%

Power

Finaval Offshore S.r.l.

Project Forwarding

29%Sofipart S.r.l.

100%

Sitie SpA50%Finaval S.p.A.

Group

Laraf S.r.l.30%



HIGHLIGHTS

• Finaval Holding SpA's profits attributable to its equity holders of 3.9 million US dollars in 2009 compares with

18.8 million US dollars for the year ended December 31, 2008, which had benefited from extraordinary

income of approximately 20 million US dollars. Consolidated service revenues amount to 102.0 million US

dollars after the 120.0 million US dollars of 2008. Gross operating profit (EBITDA) is 34,825 thousand, making

an EBITDA margin of 34.2%, an improvement on the 27,674 million US dollars (23.1%) for the year ended

December 31, 2008 before the profit on net sales of non-current assets.

Holding company

� The holding company engaged in certain financial transactions during the year, which particularly

included net purchases of Banca Popolare Emilia Romagna, ENEL, IKF and Maire Tecnimont securities for

1.2 million euros. In particular, the investment in Banca Popolare Emilia Romagna, unlike the others, was a

true institutional investment that was made to progressively increase the percentage shareholding, which

was 0.1% at December 31, 2009, including shares held by Finaval SpA.

� Laraf Srl, in which Finaval Holding held 30% (subsequently increased in 2010 to 47.5%), was established to

increase the Group's investment in specialist services for power companies. Laraf commenced operations

in 2010, acquiring a 50% shareholding in the drilling company Perazzoli Drilling Srl.

Settore Shipping

• In 2009 Finaval SpA posted consolidated profit of 1 million US dollars, whilst consolidated revenue

amounted to 91.2 million US dollars. Time charter revenue was down from 79,394 thousand US dollars in

2008 to 73,900 thousand US dollars in 2009, registering a reduction of 5,494 thousand US dollars. In addition

to the market downturn, this decrease was primarily due to the redelivery of an Aframax chartered ship

(the Jag Lata) in 2009 and the gradual withdrawal from the Small Product segment. The individual income

statement items regarding discontinued operations in this segment are reported under “Profit/(loss) from

discontinued operations”.

• Gross operating profit (EBITDA) is 34,542 thousand US dollars, representing a margin of 46.7% of time charter

revenue, an improvement on the 26,935 thousand US dollars (33.9% margin) registered at the end of 2008,

excluding from the latter profit/(loss) on the sale of non-current assets.

In absolute terms, net of extraordinary items, an increase of 7,606 thousand US dollars was registered. This

increase relates to:

• a higher fleet contribution margin (5,700 thousand US dollars);

• a reduction in indirect costs (780 thousand US dollars);

• an improvement of 1,126 thousand US dollars in “Other income/costs”.

• Profit from continuing operations is 3,993 thousand US dollars, representing a margin of 5.4% of time charter

revenue, an improvement on the 2,352 thousand US dollars (2.9% margin) registered at the end of 2008,



excluding from the latter the profit/(loss) on the sale of non-current assets. In absolute terms, net of

extraordinary items, an increase of 1,641 thousand US dollars was registered. This increase is connected

with the rise in EBITDA (7,606 thousand US dollars), offset by higher depreciation and amortisation deriving

from expansion of the fleet.

• Net profit before discontinued operations in 2008 refers to the LPG segment, regarding which operations

were terminated in March, and in 2009 also includes the Small Product segment, regarding which

operations were discontinued in 2009.

� The investment and disinvestment plan launched during the previous year was continued. As part of this

plan, the Neverland Angel and Neverland Sun were delivered during the year. These ships (Aframax with a

DWT of 115,000) are part of a group of six sister ships, which are expected to be delivered between the

end of 2010 and early 2011 (Hull 1780 and Hull 1781).

� Agreements were concluded during the year with MPS Capital Services and Banca Popolare di Milano

regarding financing of the Aframax ships scheduled for delivery between the end of 2010 and early 2011.

These loans are 50% guaranteed by SACE (Export Credit Agency controlled by the Ministry of Economic

Development).

Coal Logistics

� The contract with Enel Trade SpA for the unloading, stockpiling and reclaiming of coal at upper Adriatic

ports has been renewed.

� Negotiations are underway with the Finaval Holding Group's long-term international business associates to

expand the geographic coverage of this business from Rotterdam to Munich.

Engineering

� 2009 saw the Sofipart Group mourn the premature death on April 4 of its Chairman and friend, Leonello

Pari, who was replaced as Chairman of Sofipart and Technip KTI by Antonio Savini Nicci. Leonello Pari's

committed approach to his work and his loyalty to all of his associates made him an extraordinary man.

He was rigorous in his analysis of difficulties and issues linked to future industrial growth and development,

and convinced that it is essential to face the future with confidence and courage. This was based on his

belief that improvement could be achieved under any circumstances through innovation and open and

frank dialogue with all, and his "can-do" attitude.

� Moreover, the relationship among the shareholders of Technip KTI was tense in 2009 in connection with the

performance of certain material obligations in the shareholders’ agreement, in force at that time, ending

in litigation and the issuance of summonses. The date of the hearing regarding the admissibility of

evidence has so far not been fixed.

� Technip KTI, the primary operating company of the Sofipart group, obtained new contracts worth 329.9

million euros in 2009. The largest of these included:

� JV JGC –Tecnimont – Sulphur Recovery Unit – United Arab Emirates;

� IPLOM – Hydrogen Unit – Italy;



� IPLOM – Mild Hydrocracker – Italy;

� PIDEC – Primary Reformer – Iran;

� STSI – Sulphur Recovery Unit – Belarus;

� SAMIR – Topping Furnace – Morocco;

� GS – Sulphur Recovery Unit – Saudi Arabia;

� Takreer – Retubing of Furnaces – United Arab Emirates;

� South Refinery IRAQ – PMC for Bashar FCC Upgrading – Iraq;

� PDVSA Acuador S.A. – PMC Contract – Ecuador;

� CUVENPEQ S.A. – Engineering Services Cuba development – Cuba.

� Basic Engineering contracts worth 4.6 million euros were awarded to Technip KTI in 2009 for, among others,

the Bourgas Hydrogen Plant and a number of Iranian refineries (Hormuz, Anahita and Kuzesthan). Both the

Bourgas and Iranian contracts are expected to develop into EP or EPC contracts in the short to medium

term.

� GLT SpA's total order inflow for 2009 amounted to approximately 12 million euros.

� Program International Srl obtained new orders in 2009 totalling 5.1 million euros. The largest of the contracts

were:

� Midor Expansion DCS/ESD System;

� Invensys DCS/ESD System.

Project forwarding

� Finaval Offshore, which works in the project forwarding sector, is 100% owned by Finaval Holding. The

company's 2009 revenues totalled 4.2 million euros, which were up 43% on 2008 (2.9 million euros).

Operating margins were on par with last year.

� The results for the year, however, were influenced by the recognition of an impairment of a receivable

due from Sadelmi. Recognition of the impairment became necessary since the receivable was no longer

considered recoverable following a composition agreement with creditors.



LETTER FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS

Dear Shareholders,

Against the backdrop of the worst economic recession in decades, Finaval reports net profit of 1,197 thousand

euros (1,052 thousand US dollars) for 2009.

This was made possible by the sound strategic decisions implemented during previous years, including the

well-established partnership with Vitol, which entered its third year in 2009. This partnership has played a

decisive role in mitigating the impact of the economic downturn, strengthening our market positioning and

undoubtedly enabling the continuation of new development initiatives.

Taking into account the falling demand for petroleum products in 2009, coupled with a growing supply of

ships, Finaval's results may be considered excellent, especially in comparison with those registered by the

Group's main competitors.

Our Group closed the year with time charter revenue amounting to 73,900 thousand US dollars, substantially in

line with the figure for 2008 when the state of the market was certainly much healthier.

The investment plan launched in previous years continued during 2009 with delivery of the M/T Neverland

Angel in February, and of the M/T Neverland Sun in March. These two sister ships (Aframax with a DWT of

115,000) are part of a plan launched with the shipyard, Samsung Heavy Industries, which includes delivery of

another two sister ships between the end of 2010 and early 2011 (Hull 1780 and Hull 1781). Financing for these

acquisitions has already been obtained from two leading banks.

In the chartered ship segment, the bareboat contract regarding the fleet's last gas tanker expired in March.

Meanwhile, Cabofin Srl, a joint venture with the Cabotaggi shipping group, began winding down the business

by returning a series of ships to charterers.

************************

Despite an improvement in macroeconomic data, projections for 2010 are still significantly affected by the

weakness of the market and uncertainties regarding the world economy.

2010 will probably turn out to be a year of transition in an international context marked by radical changes

and a crisis phase, which in terms of intensity and reach, risks being the most severe and systemic since the

1970s. This crisis has put in question some of the fundamental mechanisms on which western economic systems

have been based for many years, including underestimation of the risks connected with excessive debt, a lack

of transparency and regulation in many markets and with regard to financial instruments, biased governance

systems, and the inadequacies of auditors and rating agencies. This has led to calls for companies to return to

the traditional values and practices forming the basis of market economies and sustainable business models.

************************

Bearing this in mind, our actions in 2010 will focus on optimising efficiency and consolidating market share,

whilst continuing to ensure the conditions are right for future growth.

Our Group's objective is to carry on treating this economic downturn as an opportunity to further strengthen

our competitive position and market share. This is based on the conviction that the nature of our business



model, which has been carefully established over many years, will come into its own during the recovery, and

that we will be able to leverage our team of people, who will make every effort to make a difference.

************************

Our objectives are ambitious and complex, but well within our reach. We definitely have the necessary

professionalism, skills and sense of responsibility to achieve them, and to overcome the difficulties we

encounter on our way.

The Chairman

Giovanni Fagioli

(*) Letter from the Chairman of the Board of Directors written on the occasion of the presentation of Finaval

SpA’s Consolidated Financial Statements for the year ended December 31, 2009.



THE MACROECONOMIC SITUATION

During 2009 the global economic recession led to a drastic worldwide reduction in industrial activity and

private consumption. However, the end of the year saw some slackening in the pace of the free fall in business

activity that marked the early months of the year. The major economies showed signs of recovering from

recession, helped by the fresh impetus registered by world trade. However, it should be pointed out that whilst

on the one hand global recovery is underway and the risk of falling back into recession is quite limited, on the

other, growth appears to have lost momentum in the last quarter of the year, due to the waning effect of the

temporary factors on which recent economic improvement was at least partly based. In the major developed

economies (USA, euro area, UK, Japan), the outlook for consumption and investment remains weak, and signs

of "endogenous" growth are still scarce.

Despite improvement in the last two quarters, growth in 2009 was lacklustre due to the weakness of private

demand, which collapsed everywhere, with its most dramatic impact primarily felt during the first part of the

year, including notably in the following areas: GDP contracted by 2.5% in the United States and by 4% in the

euro area, whilst Japan registered the steepest decline of 5.3%.

In the euro area, the revival of net exports and the rebuilding of inventories were the factors that had the

greatest effect on the recent improvement in the economy, and also made a contribution to GDP growth.

Indeed, the summer break brought good news on the export front. Trade volumes – which following the

bankruptcy of Lehman Brothers fell to historic lows – recovered at global level. This recovery was undoubtedly

encouraged by the highly expansionary monetary and fiscal policies implemented by governments and

central banks. Asian countries, especially China, followed by the United States and the euro area, showed

signs of recovery, which strongly boosted the stepping up of trading activities.

However, regarding the second factor that played an important role in the recovery of the last few months,

namely the rebuilding of inventories, it should be borne in mind that following the crisis and the

unprecedented fall in demand, companies decided to meet their demand by using up inventories, thereby

leading to radical destocking. In recent months, precisely as a result of very low inventory levels, it is likely that

production was rapidly stepped up in order to meet any further rise in overseas demand.

The economy, especially in the euro area, after recovering from recession last summer, was almost at a

standstill at the end of 2009 and in early 2010. However, as only some of the stimulus factors are temporary, the

recovery should gather momentum around the middle of the year.

In any event, weak internal demand will continue to hamper growth this year, and we will have to wait until

2011 for a rally in domestic components of the economy. Overseas trade, together with the replenishment of

stocks, will be the primary drivers of growth this year. The traditional volatility of these components is likely to

mean that the path to recovery will remain uneven.

* * * * * * * * * * *

Finally, investment is still the weakest point in this fragile economic situation, which is continuing its two-year

decline in the euro area (down 0.7% in 2008 and down 10.8% in 2009)and in Japan (down 1.6% in 2008 and

down 19.3% in 2009). In the United States, however, the fall was most marked in 2009 (down 17.8%) after



moderate growth in 2008 (up 1.8%). Companies are finding it hard to restart capital investment, and this

difficulty is likely to last throughout 2010.

However, business activity indicators deriving from business confidence surveys continue to show an

improvement in trends. After collapsing to historic lows at an unprecedented speed, business confidence

indicators are back on the upswing and have returned to levels that point towards expansion of business

activity. This is thanks to steady overall improvement across all components. The most significant improvements

were registered in components relating to new orders, which in the euro area have returned to pre-economic

crisis levels.

Moreover, manufacturing indices have registered even more positive and interesting data. The Purchasing

Managers' Index (PMI) started rising in October 2009 to reach 51.6 points in December, a far cry from the low

of 33.5 points it touched in February 2009.

Likewise, the United States' ISM manufacturing index rose from 35.6 points in January 2009 to 55.9 points in

December.

Regarding the labour market, on the other hand, recovery appears to be slower and further off. The

contraction in productive activity in recent years has produced a sharp fall in jobs, which persisted throughout

2009. Indeed, at the end of the year the total number of jobs lost in the US economy reached 4.7 million

(compared with 3.8 million in 2008). This deterioration was highly significant, and led to a sharp rise in the

unemployment rate, which reached 10%.

In the euro area, partly due to employment support initiatives that reduced job losses, indicators registered a

better performance. Whilst the first tentative signs of improvement can be glimpsed, there is a great risk that

employment levels will also remain low for most of 2010 due to substantial underemployment of the workforce.

The International Energy Agency (IEA) has raised its estimate of world oil demand to more than 86 million barrels per day (bpd). The greatest contribution to oil consumption will come from countries outside Opec, including China and Brazil. World oil demand will hit a record this year, the International Energy Agency (IEA) said, revising up consumption estimates as the world economy recovers from recession. The agency said that world oil demand would reach an average of 86.60 million bpd this year, up from 84.93 million in 2009. The previous record high for world oil demand was in 2007 before the onset of the global financial crisis and economic slowdown. “There are signs of oil demand picking up in North America and the Pacific, Asia and the Middle East, although consumption in Europe still looks weak,” said David Fyfe, head of the IEA’s Oil Industry and Markets Division. But the extra demand will largely be met by production from outside Opec. The IEA raised its forecast for non-Opec output in 2010 by 220,000 bpd to around 52.0 million bpd. China, Saudi Arabia, Russia, Brazil, Iran and India would account for three quarters of world oil demand in the current year. Overall, non-Opec supply is expected to rise by around 500,000 bpd this year. As a result, the IEA estimated demand this year for Opec crude and stocks would fall by 200,000 bpd to 29.1 million bpd.

Source: Wall Street Journal



Regarding the outlook, in the first half of 2010 the state of the world economy appears to be better than

forecast, except perhaps in the euro area. The cautious withdrawal of fiscal and monetary stimulus underway

has reduced the risk of falling back into recession in the future.

Signs of recovery have continued to build up over recent months. In January global exports in dollars were up

1.7% on the average reported in the previous quarter, an increase of almost 33% on the disastrous first quarter

of 2009. The trade recovery is accompanied by an increase in the cost of sea freight, regarding both the Baltic

Dry Index and oil transport, which cannot be merely explained by the rise in the price of oil. The geographical

spread of monthly increases in industrial output remains high, albeit less than in the third quarter of 2009.

Therefore, compared with three months ago, it's no surprise that average growth estimates have been revised

upwards for all geographical areas except the euro area, and that projections for 2011 still foresee

consolidation of the global economic recovery.

Regarding monetary policy, the European Central Bank (ECB), having raised the refinancing rate to 1.00%,

took several steps towards an effective resolution of the financial crisis and in support of the real economy, by

acquiring guaranteed bonds and extending liquidity facilities for banks, with a view to revitalising one of the

markets most severely hit by the financial crisis and reopening a source of funding for the banking system.

In the USA, the Federal Reserve, after lowering the federal funds rate to a historic minimum, ranging between 0

and 0.25%, implemented a policy of quantitative easing, thereby injecting liquidity into the market by

purchasing treasury bonds, as well as extending the TALF (Term Asset-Backed Securities Loan Facility).

The first signs of improvement in business activity provoked a euphoric reaction from stock markets, which

registered gains of 20% to 30% in just over two months. At the same time, returns on the longest part of the



bond yield curve rose substantially, almost reaching 4% on 10-year bonds in the USA and 3.70% in the euro

area. However, this increase in bond yields was interrupted during the summer when indicators from the real

economy were not quite so unambiguous, suggested that pulling out of recession might still take some time.

Regarding the exchange rate between the euro and the dollar, 2009 saw an overall strengthening of the

single European currency, with the average exchange rate rising from 1.32 in January to a peak of 1.49 in

November 2009. The euro began to weaken in December, a process that continued in the early months of

2010, with an exchange rate of 1.4406 registered on December 31, 2009. Therefore, at the end of the year an

average annual exchange rate of 1.39 US dollars to the euro was reported, considerably less than the 1.47 US

dollars per euro registered in 2008.



RESULTS OF OPERATIONS

The following schedule shows Finaval Holding Spa’s consolidated results, reclassified and compared with the

consolidated results of the previous year.

CONSOLIDATED INCOME STATEMENT (USD/000) dec-09 % Changes % dec-08 %

Revenues 101,960 100.0% -15.0% 120,019 100.0%

Operating costs -56,404 -55.3% -29.3% -79,742 -66.4%

CONTRIBUTION MARGIN 45,556 44.7% 13.1% 40,277 33.6%

Overhead costs -11,947 -11.7% -5.5% -12,638 -10.5%

Other costs and revenues 1,216 1.2% NA 35 0.0%

Result on disposal of vessel 0 0.0% NA 20,006 16.7%

EBITDA 34,825 34.2% -27.0% 47,680 39.7%

Amortisation & depreciation -24,149 -23.7% 34.8% -17,909 -14.9% Provisions for potential losses on current receivables -281 -0.3% NA -5 0.0%

EBIT 10,395 10.2% -65.1% 29,766 24.8%

Net Financial income (charges) -3,196 -3.1% 21.5% -4,073 -3.4%

PRE-TAX RESULT 7,199 7.1% -72.0% 25,693 21.4%

Income taxes for the year -60 -0.1% -91.0% -656 -0.5%

PROFIT FROM CONTINUING OPERATIONS 7,139 7.0% -71.5% 25,037 20.9%

Net result from discontinued operations -2,942 -2.9% 227.6% -898 -0.7%

NET PROFIT 4,197 4.1% -82.6% 24,139 20.1%

Minority share of profit/(loss) for the period 263 0.3% NA 5,336 4.4%

GROUP RESULT 3,934 3.9% -79.1% 18,803 15.7%

� Revenue was down from 120,019 thousand US dollars in 2008 to 101,960 thousand US dollars in 2009,

registering a reduction of 18,059 thousand US dollars, primarily due to reclassification of the Small Product

segment amongst discontinued operations.

• Gross operating profit (EBITDA) is 34,825 thousand US dollars, representing a margin of 34.2% of revenue, an

improvement on the 27,674 thousand US dollars (23.1% margin) registered at the end of 2008, excluding

from the latter profit/(loss) on the sale of non-current assets.

In absolute terms, net of extraordinary items, an increase of 7,151 thousand US dollars was registered. This

increase relates to:

� a higher contribution margin (5,279 thousand US dollars);

� a reduction in indirect costs (691 thousand US dollars);

� an improvement of 1,181 thousand US dollars in “Other income/costs”.



• Depreciation and amortisation and finance income/(costs) were affected by expansion of the fleet and

the exchange rate between the euro and the US dollar. In 2008 positive exchange rate differences

amounted to 3,907 thousand US dollars, whilst in 2009 negative exchange rate differences totalling 2,351

thousand US dollars were registered, resulting in a difference of approximately 6.3 million US dollars

compared with the previous year.

• Net profit before discontinued operations in 2008 refers to the LPG segment, and in 2009 also includes the

Small Product segment regarding which operations were discontinued in 2009.

� Profitability with respect to invested capital breaks down as follows:

- Return on Equity (Net profit/(loss)/Average net capital for the period): 2.1%;

- Return on Investment (Operating profit/Average invested capital for the period): 2.6%

In calculating the Return on Equity, profit/(loss) from continuing operations was taken into account,

therefore excluding net profit/(loss) from discontinued operations.

The consolidated results, reported in the presentation currency (the euro), reclassified and compared with the

consolidated results for the previous year, are shown below.

CONSOLIDATED INCOME STATEMENT (USD/000) dec-09 % Changes % dec-08 %

Revenues 73,709 100.00% -10.30% 82,145 100.00%

Operating costs -40,923 -55.50% -24.70% -54,327 -66.10%

CONTRIBUTION MARGIN 32,786 44.50% 17.90% 27,818 33.90%

Overhead costs -8,543 -11.60% -1.30% -8,652 -10.50%

Other costs and revenues 904 1.20% -2912.40% 30 0.00%

Result on disposal of vessel 0 0.00% NA 14,318 17.40%

EBITDA 25,147 34.10% -25.00% 33,514 40.80%

Amortisation & depreciation -17,286 -23.50% 40.00% -12,348 -15.00% Provisions for potential losses on current receivables -202 -0.30% NA -3 NA

EBIT 7,659 10.40% -63.80% 21,163 25.80%

Net Financial income (charges) -2,017 -2.70% 12.30% -2,299 -2.80%

PRE-TAX RESULT 5,642 7.70% -70.10% 18,864 23.00%

Income taxes for the year -41 -0.10% -91.10% -462 -0.60%

PROFIT FROM CONTINUING OPERATIONS 5,601 7.60% -69.60% 18,402 22.40%

Net result from discontinued operations -2,121 -2.90% 259.50% -590 -0.70%

NET PROFIT 3,480 4.70% -80.50% 17,812 21.70%

Minority share of profit/(loss) for the period 299 0.40% NA 3,985 4.90%

GROUP RESULT 3,181 4.30% -77.00% 13,827 16.80%



FINANCIAL POSITION

A Consolidated Balance Sheet including comparative data relating to the previous year, and a condensed

Consolidated Statement of Cash Flows are shown below. In particular:

� equity:

− rose by around 3.9 million US dollars due to the effect of profit for the period;

− increased by around 3.2 million US dollars following the fair value measurement of available-for-sale

financial assets and "effective" derivative financial instruments;

� fixed assets increased by 66.5 million US dollars, primarily due to the combined effect of:

− the acquisition of the Neverland Angel and Neverland Sun;

− depreciation and amortisation for the year;

� net debt rose by 65.6 million US dollars from 274.2 million US dollars to 339.5 million US dollars, due to the

combined effect of the positive operating performance, offset by the financial effects deriving from the

above-mentioned investment and disinvestment;

� the debt to equity ratio rose from 1.48 to 1.75;

� the quick ratio (cash and deferred/current liabilities) fell from 76% to 55%;

� net working capital changed from a negative 15.8 million US dollars to a negative 8.4 million US dollars,

primarily due to the effect of a reduction in the amount due to the Korean shipyard Samsung, following

payment of an instalment relating to the purchase cost of a ship in January 2009.

CONSOLIDATED BALANCE SHEET (in Usd Millions)

dic-09 dic-08 dic-09 dic-08

NON-CURRENT ASSETS 543.4 102% 476.8 104% SHAREHOLDERS’ EQUITY 194.5 36% 185.7 40%

Intangible assets 15.4 3% 15.4 3% Property, plant &

equipment 510.2 96% 446.8 97%

Financial assets 17.8 3% 14.6 3% NET FINANCIAL POSITION 339.8 64% 274.2 60%

Banks - medium/long-term 306.2 57% 270.3 59%

Banks – short term 75.6 14% 61.3 13%

NET WORKING CAPITAL -8.4 -2% -15.8 -3% Cash and cash equivalents -37.2 -7% -61.2 -13%

Derivative instruments 0.5 0% 6.6 1%

PROVISION FOR FUTURE

CHARGES -0.7 0% -1.1 0% Securities in portfolio -5.3 -1% -2.8 -1%

NET CAPITAL EMPLOYED 534.3 100% 459.9 100% NET CAPITAL EMPLOYED 534.3 100% 459.9 100%



CONSOLIDATED BALANCE SHEET (in Euro Millions)

dic-09 dic-08 dic-09 dic-08

NON-CURRENT ASSETS 377.2 102% 342.6 104% SHAREHOLDERS’ EQUITY 135.0 36% 133.4 40%

Intangible assets 10.7 3% 11.1 3% Property, plant &

equipment 354.1 96% 321.0 97%

Financial assets 12.4 3% 10.5 3% NET FINANCIAL POSITION 235.9 64% 197.0 60%

Banks - medium/long-term 212.5 57% 194.2 59%

Banks – short term 52.5 14% 44.0 13%

NET WORKING CAPITAL -5.8 -2% -11.4 -3% Cash and cash equivalents -25.8 -7% -44.0 -13%

Derivative instruments 0.4 0% 4.7 1%

PROVISION FOR FUTURE

CHARGES -0.5 0% -0.8 0% Securities in portfolio -3.7 -1% -2.0 -1%

NET CAPITAL EMPLOYED 370.9 100% 330.5 100% NET CAPITAL EMPLOYED 370.9 100% 330.5 100%

CONSOLIDATED CASH FLOW STATEMENT – Usd/000

31-dic-09 31-dic-08

Cash flow generated from operating activities before working capital changes 31,944 25,853

Financial income/(charges) net of translation exchange gains(losses) and the IAS 32 and 39 effects (4,084) (10,504)

Cash flow generated from working capital (8,285) 2,998

Cash flow generated/(absorbed) from Operating Activities (A) 19,575 18,347

Cash flow generated/(absorbed) from Investing Activities (B) (96,081) (91,535)

Cash flow generated/(absorbed) from Financing Activities (C) 54,827 92,401

Cash flow generated (absorbed) in the year (A+B+C) (21,679) 19,213

Effect of the changes in foreign exchange rates (D) -2,351 3,907

Cash and cash equivalents at the beginning of the year (E) 61,190 38,070

Cash and cash equivalents at the end of the year (A+B+C+D+ E) 37,160 61,190





SHIPPING

FINAVAL



BUSINESS SEGMENTS AND MARKETS IN WHICH THE GROUP OPERATES

Tanker charters started declining at the beginning of 2009, registering a sharper fall in the second quarter

followed by a recovery at the end of the year, which continued into early 2010. This rally was encouraged by

an overall improvement in macroeconomic data and a very harsh winter, which drove the recovery in

demand for petroleum products. In the future, an increase of 0.5 million bpd in non-Opec production, and an

equivalent rise in Opec production, are projected. The margin of surplus capacity is estimated at more than 6

million bpd, albeit on the decrease in 2010 and 2011. The estimated rise in demand remains at 1.3 million bpd.

The long-term outlook is still dominated by hikes connected with rising per capita energy consumption in

emerging economies, but the substantial margin of surplus capacity and stock levels should keep the lid on

the oil price, at least in 2010.

An increase in the demand for oil would have effects on the demand for tankers, sustained by a multiplier

effect deriving from the ongoing transfer of refineries from OECD countries to Asia.

These effects are offset by projected increases in the supply of tankers, which will be substantially affected by

a reduction in deliveries due to order postponements and cancellations during 2009. Essentially, the number of

tankers in the marketplace should rise over the next few years, but at a lower than projected rate of increase.

Aframax segment

In 2009 ships in this sector reported a yield from spot charters of around 15,500 dollars a day, compared with

the yield of around 50,000 dollars a day registered in 2008. The average yield from one-year time charters

amounted to 20,000 dollars a day, compared with around 35,800 dollars a day in 2008.

These decreases, especially regarding the spot market, were due to the following factors:

− Yields were particularly high in 2008, due to the high degree of volatility of the price of oil, which tended to

encourage trade. Therefore, a substantial part of the decline in yields is due to a readjustment with

respect to the levels of the previous year, which were above normal market trends.

− The financial and economic crisis led to a slowdown in the global economy throughout 2009, lack of

liquidity and substantial use of oil stocks.

− The supply of tankers peaked in 2009, due to a backlog of orders placed in previous years, which were

only partially postponed and/or cancelled.

The decline in yields had repercussions on new builds as well as on the second-hand ship market.

During 2009, 18 Aframax vessels were demolished compared with 12 in the previous year, and 96 new ships

were delivered, compared with 68 in 2008.

However, it should be borne in mind that, by the end of 2010, the regulations regarding the maritime safety of

tankers and the demolition of single-hull tankers (the so-called phase out) will have been almost completely

implemented. By that date, this should have led to a substantial downsizing of the global tanker fleet currently

operating. Indeed, 34 ships are scheduled to be demolished during the year for this reason.



The average commercial yield for ships managed by the Finaval Group in this sector was around 26,400 dollars

a day, obtained through a mix of spot and time charters.

MR Product segment

At the end of December 2009 the spot yield for MR Product ships registered a daily average, on an annual

basis, of around 8,000 dollars compared with 23,000 dollars in 2008. Three-year time charters for the same type

of ship reported a similar performance, but with a less sharp decline, falling from around 22,000 dollars a day in

2008 to around 16,000 dollars a day in 2009.

The reasons for this albeit less marked decrease are the same as those cited above with respect to the

Aframax segment.

In this sector, regarding approximately 70% of its available tonnage, the Finaval Group has launched a policy

to stabilise charter income by means of long-term charter contracts integrated with profit sharing mechanisms.

These contracts call for recognition of a basic charter fee and the sharing of any returns over and above the

minimum with the Company’s trade partner. The agreements expire in 2010 and 2011.



THE FLEET MANAGED

THE FLEET MANAGED

Isola Bianca: Panama canal transit The fleet of the Finaval group at December 31, 2009 is as follows::

SHIP HULL CLASSIFICATION DWT/Mc YEAR OWNERSHIP

Crude

Neverland Double Hull N/A 105,411 2003 Finaval

Neverland Angel Double Hull N/A 114,800 2009 Finaval

Neverland Sun Double Hull N/A 114,800 2009 Finaval

TBN5 Hull 1780 Double Hull N/A 114,800 2010 Finaval

TBN6 Hull 1781 Double Hull N/A 114,800 2010 Finaval

Product

Isola Verde Double Hull N/A 36,457 1994 Finaval

Isola Magenta Double Hull N/A 36,457 1994 Finaval

Isola Bianca Double Hull N/A 50,100 2008 Finaval

Isola Celeste Double Hull N/A 50,100 2008 Finaval Tanker

Isola Blu Double Hull N/A 50,100 2008 Finaval

Isola Corallo Double Hull N/A 50,100 2008 FinavalShipping

Naftilos AN Double Hull IMO III 37,379 2003 Naftilos AM (*)

Angelica Double Hull IMO III 46,408 1999 Angelica Sh.(*)

Atlantic Grace Double Hull IMO III 46,600 2008 A.P.Moller-

Atlantic Star Double Hull IMO III 46,600 2008 A.P.Moller-

Letizia Effe Double Hull IMO II 13,472 2008 Elbana di

(*)a Joint Venture of the Finaval Group with the Ancora Shipping Group



COMMERCIAL ACTIVITIES

COMMERCIAL ACTIVITIES

The following table contains the details regarding the type of use for each ship at December 31, 2009.

SHIP USE CHARTERERS

Crude

Neverland Tc Reliance

Neverland Angel Tc Mansel Oil Ltd

Neverland Sun Tc Mansel Oil Ltd

Products

Isola Verde Spot World wide

Isola Magenta Spot World wide

Isola Bianca Tc Mansel Oil Ltd

Isola Celste Tc Mansel Oil Ltd

Isola Blu Tc Mansel Oil Ltd

Isola Corallo Tc Mansel Oil Ltd

Naftilos AN Spot World wide

Angelica Tc Mansel Oil Ltd

Atlantic Grace Spot World wide

Atlantic Star Spot World wide

Letizia Effe Spot Mediterranean Area



HUMAN RESOURCE MANAGEMENT

In 2009 human resource management was also subject to the pressures and effects of the adverse economic

conditions in which Finaval, amongst others, was bound to operate. The fear of economic downturn that was

looming at the end of 2008 was confirmed during the year, and in certain respects the recession became

deeper and more severe.

At the end of 2008 the Group began monitoring personnel expenditure items regarding both shipboard and

administrative staff. This analysis also regarded external components that influence the composition of these

costs, including assessments relating to our technical management providers and overseas staff recruitment

services.

During 2009 this analysis saw implementation via initiatives regarding personnel, which will continue in 2010. A

genuine attempt was made to take a long-term view in managing the effects of the global economic crisis,

by implementing restructuring measures that will become a vital and integral part of our strategy aimed at

ensuring the Group's business continuity.

Specifically,

� analysis of the composition of crews and nationalities was stepped up, involving the development of new

programmes, including IT initiatives, to manage and optimise shipboard shift working and cut logistics

costs;

� in order to improve efficiency, integration and synergies between departments, we asked our technical

partner to bring the team responsible for our contract into direct contact by opening a branch in Rome,

located at our head office. The move was successfully completed in April 2009;

� it was decided to step up contacts with the agencies that supply overseas shipboard personnel, in order

to monitor cost and training trends regarding crews in a more incisive and comprehensive manner.

Moreover, on a different tack and often going against the general trend, the Group has confirmed and

sometimes raised levels of expenditure allocated to shipboard welfare, training and safety.

Data regarding the composition of office staff, whose average age is 40.3, are shown below.



Office personal

breakdown by age groups

Age Groups Number of employees % number of

employees

≤ 25 1 3.70%

26-30 1 3.70%

31-35 4 14.81%

36-40 9 33.33%

41-45 7 25.93%

46-50 4 14.81%

51-55 0 0.00%

56-60 1 3.70%

>60 0 0.00%

Total 27 100.00%

breakdown by type of contract

Contract Number of employees % number of

employees

Fixed term contracts 2 7.41%

Indefinite duration 25 92.59%

Total 27 100.00%

Staff turnover 40.3



Seagoing crew: composition

nationality %

Italian 28%

Indian 44%

Philippine 18%

other 10%

total 100%

Seagoing crew: average age

Grade average age

Master 47.25

Chief Mate 37.00

2nd Mate 32.50

3rd Mate 24.75

Deck Cadet 22.00

Bosun 49.50

Pumpman 47.00

AB 40.25

Deck boy 26.25

OS 25.50

Chief Engineer 46.25

1st Assistant Engineer 36.00

2nd Assistant Engineer 39.50

3rd Assistant Engineer 30.75

Engine Cadet 24.25

1st Electrician 49.50

Fitter 41.75

Electrician 47.00

Fitter 38.50

Oiler 37.25

Engine Boy 32.75

Messman 38.25

Cook 40.50

Average age 36.75



Seagoing crew: training activities

Course No. maritime Days Average days %

AMOS 9 25 3 4%

FIRE ADVANCED 4 11 3 2%

FIRE BASIS 4 16 4 2%

BTM 1 3 3 0%

SPM 6 12 2 2%

ECDIS 6 24 4 3%

FAMILIARIZATION 18 92 5 13%

GMDSS 1 11 11 2%

IGS & COW 3 9 3 1%

MAMS 20 49 2 7%

MEDICAL CARE 1 6 6 1%

FIRST AID 2 2 1 0%

PSSR 4 8 2 1%

PST 2 6 3 1%

RADAR ARPA 4 21 5 3%

RADAR BASE 4 28 7 4%

SHIP HANDLING 6 30 5 4%

OSAS 18001 18 29 2 4%

SPECIALIZED CHEMICAL TNKER SAFETY 13 148 11 22%

SPECIALIZED OIL TANKER SAFETY 13 147 11 21%

PROFICIENCY IN PERSONAL SURVIVAL TECHNIQUES 3 11 4 2%

Total 142 688 100%

Indian /Filipino/Others 220

Total 362



CURRENT INVESTMENT

NEW SHIPS BUILT

Implementation of the investment plan drawn up in previous years continued during 2009.

The current phase provides for delivery of two Aframax sister ships with a DWT of 115,000 between the end of

2010 and early 2011, at a cost of around 125 million dollars.

The decision to acquire sister ships, in both the Crude Oil and Product segments, will make it possible to

rationalise and optimise investment by reducing both crew training costs and expenses relating to ship

management and maintenance, and by ensuring long-term relations with suppliers and customers.

The Aframax sister ships were commissioned directly from the Samsung Heavy Industries shipyard and are to be

built on the basis of Last Generation Aframax Tankers Standards, the world's highest technological requisites for

shipbuilding. In this regard, Finaval has invested and will continue to invest significant resources to ensure that

the ships currently under construction conform not only with existing legislation, but also with legislation that will

have come into effect by the time each ship is delivered. Such efforts will ensure compliance with current and

future regulations pertaining to safety and environmental protection.

Specifically, unlike existing vessels, the new ships will obtain the following additional certifications:

− On the part of the American Bureau of Shipping (ABS):

− Environmental Safety (ES);

− Vapour Emission Control (VEC);

− Protection of Fuel and Lubrification Oil Tanker (POT);

and from Registro Navale Italiano SpA (which manages the Italian Shipping Registry) the Green Star 3 Design,

which certifies that the ship has been built with special devices for preventing sea and air pollution.

The ES and Green Star certifications are the most advanced, complete and difficult to obtain in the field of

environmental protection.

ALL SHIPS IN THE FLEET

Retrofitting works will be carried out during 2010 to upgrade boilers and fuel equipment to bring them into line

with new requirements regarding the use of fuels with low sulphur content, introduced under European

(Directive no. 33/2005), Californian (CARB Regulation) and IMO (SECA areas) regulations.

These works will entail modification of burners and control and safety systems, and regulation of combustion

parameters regarding light gas oils.

Regarding the latest Aframax ships awaiting delivery as mentioned above, these modifications have been

discussed with the shipyard and will be carried out at an extra cost of around 250,000 US dollars per vessel.



COAL LOGISTIC

VIANN LOG – M.B.S.





COAL LOGISTIC

Finaval Holding operates in this sector through the intermediate holding company, Viann Log Lda., which is

also 50% held by Coe Clerici Logistic Spa, Italy's largest provider of coal logistics services.

Viann Log Lda is the 100% shareholders of MBS – (Mediterranean Bulk System NV), which has been engaged in

coal storage, logistics and transport for many years.

Its operations are located at the Croatian port of Rjieka - Bakar and the Slovenian port of Koper, where MBS

operates under exclusive contracts for the storage of coal primarily bound for power stations in the Adriatic

and central Europe.

Its contract with Enel Trade SpA for the unloading, storage and reclaiming of coal in the upper Adriatic has

been renewed to December 2011.

Negotiations are underway with Finaval Holding's long-term international associates to expand the

geographic coverage of this business from Rotterdam to Munich. The project entails the replication in central

and eastern Europe of the now consolidated business model that has marked the success of Viann Log. The

plan is to expand the scope and type of services by storing liquid fuels for power generation, as well as solid

fuels.





PROJECT FORWARDING

FINAVAL OFFSHORE





SETTORE PROJECT FORWARDING

Finaval Offshore has also adopted the Group's strategy of developing transport and advanced, value-added

logistics technologies.

Although the strategy entails major innovations for the business model, it remains founded on the continuity of

the history of the Finaval Holding Group, which has been active in the sector for over ten years thus

developing operational expertise and commercial relationships.

Finaval Offshore, which works in the project forwarding sector, is 100% owned by Finaval Holding. The

company's 2009 revenues totalled 4.2 million euros, up 43% on 2008 (2.9 million euros). Operating margins were

on a par with last year.

The results for the year, however, were influenced by the recognition of an impairment of a receivable due

from Sadelmi. Recognition of the impairment became necessary since the receivable was no longer

considered recoverable following a composition agreement with creditors.





ENGINEERING

SOFIPART – KTI MANAGMENT –

TECHNIP KTI - SITIE





ENGINEERING

2009 saw the Sofipart Group mourn the premature death on April 4 of its Chairman and friend, Leonello Pari,

who was replaced as Chairman of Sofipart and Technip KTI by Antonio Savini Nicci.

Moreover, the relationship among the shareholders of Technip KTI was tense in 2009 in connection with the

performance of certain material obligations of the shareholders agreement, in force at that time, ending in

litigation and the issuance of summonses. The date of the hearing regarding the admissibility of evidence has

so far not been fixed.

With respect to company structure:

� KTI Iberia SL was incorporated on April 2, 2009 for the management of contracts and loans to Spanish

companies and financial institutions.

� Program International Consulting Engineers acquired the 100% shareholding in Program International, in

which it had previously held 38%.

With respect to order inflow:

� Technip KTI, the primary operating company of the Sofipart group, obtained new contracts worth 329.9

million euros in 2009. The largest of these included:

� JV JGC –Tecnimont – Sulphur Recovery Unit – United Arab Emirates;

� IPLOM – Hydrogen Unit – Italy;

� IPLOM – Mild Hydrocracker – Italy;

� PIDEC – Primary Reformer – Iran;

� STSI – Sulphur Recovery Unit – Belarus;

� SAMIR – Topping Furnace – Morocco;

� GS – Sulphur Recovery Unit – Saudi Arabia;

� Takreer – Retubing of Furnaces – United Arab Emirates;

� South Refinery IRAQ – PMC for Bashar FCC Upgrading – Iraq;

� PDVSA Acuador S.A. – PMC Contract – Ecuador;

� CUVENPEQ S.A. – Engineering Services Cuba development – Cuba.

� Basic Engineering contracts worth 4.6 million euros were awarded to Technip KTI in 2009 for, among others,

the Bourgas Hydrogen Plant and a number of Iranian refineries (Hormuz, Anahita and Kuzesthan). Both the

Bourgas and Iranian contracts are expected to develop into EP or EPC contracts in the short to medium

term.

� The Research and Development Division continued to obtain new business in 2009 in technologies of

major strategic importance in which Technip KTI has developed expertise, including a European

Community contract for research into Hydrogen production, the Innovative Catalytic Next-GTL project,

primarily to obtain knowledge and expertise in catalytic partial oxidation (CPOX).

� GLT SpA acquired total orders of approximately 12 million euros in 2009.



� Program International Srl obtained new orders totalling 5.1 million euros in 2009. The largest of the contracts

were:

� Midor Expansion DCS/ESD System;

� Invensys DCS/ESD System.

Technip KTI was also involved in a large Egyptian project in early 2009, involving construction of a 165,000

Nm3/h capacity hydrogen plant as part of the SRPC (Soukhna Refinery Petrochemicals Co.) refinery, which is

currently under construction. This led to the award, last May, of a BOOT (Build, Own, Operate and Transfer)

contract. The contract entails the construction and operation of the plant until its transfer to the final customer

at the end of the contract.

2009 was also important for Technip KTI's entry into the South American market through the completion of two

contracts in Ecuador and Cuba.

Profit for the year was 13.5 million euros, despite the 18.77% fall in revenues, primarily due to the impact of the

financial crisis on business. The ability to earn this level of profits was made possible by Technip KTI's

performance and the closure of certain of its projects due to the lack of technical and financial resources.

Key financial data is shown below with 2008 comparatives. All data has been taken from Sofipart Srl's financial

statements which were prepared in accordance with Italian GAAP.

ECONOMIC FIGURES ( EUROS MILION) 2009 % Ch % 2008 %

Revenues 179.2 100.00% -18.77% 220.6 100.00%

EBIT 19.9 11.10% 64.46% 12.1 5.49%

EBT 22.7 12.67% 18.85% 19.1 8.66%

Net Result 13.5 7.53% 9.76% 12.3 5.58%

FINANCIAL FIGURES ( EUROS MILION) 2009 2008

Equity 40.3 30.9

Net financial position 104.0 104.6

Working capital -3.1 6.2



EVENTS AFTER DECEMBER 31, 2009 AND

OPERATING OUTLOOK

Regarding events occurring after December 31, 2009 that might affect the Company's operations:

− on March 29, 2010, with effect as of April 1, 2010, Finaval SpA acquired a business unit called “Teknè

Roma" from Teknè Sam, which will be responsible for technical management of the ships in Finaval's fleet.

This enabled insourcing of the technical management that was previously outsourced.

− Laraf commenced operations in early 2010 through the acquisition on February 19, 2010 of a 50%

shareholding in the drilling company Perazzoli Drilling Srl at a maximum agreed price of 2.55 million euros.

The acquisition was financed by a capital injection by shareholders on February 17, 2010 of 800 thousand

euros and a shareholder loan of 1.7 million euros.

− A 29.24% shareholding in Sofipart Srl was sold to Maire Tecnimont SpA on May 19, 2010,

for which a preliminary contract was signed on March 5, 2010, subject exclusively to review by the Polish

antitrust authorities. The sale was duly concluded and approved during the first ten days of May. The

parties then concluded the definitive share transfer.

In terms of the operating outlook, the shipping market (the liquid transportation segment) is expected to

continue to feel the economic and financial crisis that has affected all global economies since the second

half of 2008. However, charters in 2010 should maintain average returns in line with those achieved in 2009.

Taking into account that approximately 65% of the ships operated by the Finaval Group are under long-term

contracts, net profit for the year is expected to be substantially in line with the result achieved in 2009.



RISK MANAGEMENT

In the carrying out of its activities, the Finaval Group is exposed to business risks, principally linked to trends in

the charter market and to the damage or loss of corporate assets, and to financial risks, connected to

euro/dollar exchange rate trends and movements in interest rates.

Consequently, as in past years, in 2007 the Group continued to hedge such risks via the use of long-term trade

contracts, adequate insurance cover for its assets, and derivative instruments offered by leading Italian and

foreign banks.

BUSINESS RISK

Revenues in the shipping sector are traditionally highly volatile due to factors that individual operators cannot

control. In particular, the oil and petroleum products transport market in which the Company operates might

be influenced by adverse economic conditions which, albeit to a moderate extent, occurred in the last few

months of the year.

For this reason, for some years now, the Finaval Group has offset possible revenue swings via long-term trade

agreements designed to stabilise revenues from its ships. Specifically, in the crude oil and product carrier

segment, the Company has signed long-term contracts providing for a pre-established level of charter

income, where possible coupled with a profit-sharing scheme, whereby the Company and its trade partner

divide any returns over and above this level.

It should also be pointed out the Company has been carefully studying and monitoring the derivatives market

regarding oil tanker charters for some months. We believe that in the future this could become a useful

instrument for hedging business risks relating to the use of ships on spot markets.

RISK OF DAMAGE TO OR LOSS OF CORPORATE ASSETS

Finaval’s insurance system amply covers the risks connected to its operations.

Adequate cover has been provided for risks connected to any damage to the environment caused by

accidental pollution.

Finaval’s policy in this regard is in line with the general procedures widely adopted by leading shipping

companies.

The Company’s insurance policy includes, among other things, the following usual types of coverage for

maritime activities:

“Hull & Machinery”. All Company-owned ships are insured against damage to the hull and machinery

including the risk of war and total loss. Each ship is insured for at least its carrying amount and well beyond its

related mortgage value.

“Protection & Indemnity”. The entire fleet is insured against pollution risks for up to US$1,000 million and has

unlimited coverage for accidents involving the crew, cargo and, in general, third parties. P&I insurance is

provided by a form of club and thus, as in the case of any form of mutual insurance, members enjoy reduced

overall liability, on the one hand, whilst, on the other, they may be asked to make additional payments when

necessary.



INTEREST RATE RISK

Finaval's strategy aims to hedge up to 50%-60% of its medium-/long-term borrowings via transactions with

different characteristics, which in combination enable the impact of fluctuations in interest rates on finance

income/(costs) to be minimised.

OTHER RISKS CONNECTED WITH SECURITY AND DISCLOSURE

Finaval SpA is subject to risks connected with security and disclosure. In order to prevent and mitigate such

risks, Finaval SpA has implemented initiatives in the following areas:

- Management Control.

In order to make data more available and easier to understand, the Company has organised its internal

accounting systems so as to enable interpretation of analytical data regarding individual business units and

cost centres. This data is periodically compared with budget data to enable understanding and analysis of

any variations reported.

- Legislative Decree 231/01

Legislative Decree 231/01 makes companies responsible for certain offences committed in their interests or to

their advantage by representatives, directors or managers of the company or of a department that is

financially and functionally autonomous, or by those who exercise, also in a de facto manner, management

and control (so-called apex entities), or by persons subject to the management and supervision of the

aforementioned entities (entities under the management of others).

Articles 6 and 7 of this Decree specify that the Company:

1) is not responsible for offences committed by senior management if it can prove that:

a) the Board of Directors has adopted and efficiently implemented, before the violation in question, suitable

organisational and management models aimed at preventing the type of offence committed;

b) the task of supervising the functionality of and compliance with the models as well as their updating was

entrusted to an internal entity with independent powers to act and control;

c) the persons have committed the offence by fraudulently avoiding compliance with the organisational and

management models;

d) there was no omission or insufficient surveillance on the part of the entity as per letter b);

2) responds for offences committed by entities under the management of others if the offence was made

possible due to the non-fulfilment of obligations of management or surveillance. In any case, the Company is

not liable if, before the time of the offence, it adopted and efficiently implemented suitable organisational

and management models aimed at preventing the type of crime committed.

With the resolution passed by the Board of Directors on October 5, 2005, Finaval SpA decided to equip itself

with an organisational, management and control model pursuant to Decree 231 of June 8, 2001.

This model was certified by RINA on March 1, 2006.

Apart from legislative and organisational obligations, Finaval has also adopted a code of ethics, setting out

rights, duties and responsibilities with the aim of promoting, recommending or prohibiting certain behaviours.



Data protection

In compliance with the provisions of Decree 196 of June 30, 2003, regarding “Regulations concerning data

protection”, Finaval SpA has drawn up and approved its Data Security Planning Document.

The document contains plans for security measures aimed at minimising the risks of destruction or loss,

including by accidental means, of personal data as well as unauthorised access to or improper processing of

data or use of data other than for its intended purpose. The concept of security measures comprises all

technical, IT, organisational, logistical and procedural security precautions.



RELATIONS WITH GROUP COMPANIES

PARENT AND AFFILIATED COMPANIES

The following receivables and payables were due from and to subsidiaries and associates:

� receivables amounting to 227 thousand US dollars due from Logeco Srl;

� payables amounting to 1,212 thousand US dollars due to Novamar International Scarl.

All transactions were carried out on an arm's length basis.



ADDITIONAL INFORMATION

RESEARCH AND DEVELOPMENT ACTIVITIES

Research and Development by the associated company, Technip KTI, was primarily concentrated on CPOX

(Catalyst Partial Oxidation) technology for ENI, which, after the successful launch of its first facility at a multi-

fuel service station in Italy, confirmed its intention to continue its plans for the development of processing

capacity for medium to large sized production units.

In addition to CPOX, Group companies continued the development of processing for the production of bio-

fuels from seaweed, and drawing up the specifications of a pilot plant for related experimentation.

An agreement was concluded with a Siemens group company for the joint development of a dynamic solar

thermal power plant.

Technip KTI is also continuing the development of a high temperature gasifier for the treatment of automobile

shredder residue.

The European Community is also providing finance for the NEXT GTL project, under which Technip KTI is

responsible for the development of a membrane reactor using CPO technology.

TREASURY STOCK OR PARENT COMPANY’S SHARES OR HOLDINGS IN THE PORTFOLIO

The Company did not purchase or sell any shares or holdings in the Parent Company, nor did it purchase or sell

any of its own shares during the period.



FINAVAL HOLDING SPA CONSOLIDATED FINANCIAL STATEMENTS

AS AT DECEMBER 31, 2009



CONSOLIDATED BALANCE SHEET

In Euro thousands

ASSETS 31-dec-09 31-dec-08 NOTE

NON-CURRENT ASSETS

PROPERTY, PLANT & EQUIPMENT

Fleet 339,868 267,000 A

Fleet under construction 12,131 51,613 B

Other assets 2,146 2,436 C

INTANGIBLE ASSETS 10,678 11,051 D

FINANCIAL ASSETS

Subsidies 0 4 E

Other receivables and deposits 2,280 2,914 F

Equity investments 13,594 9,472 G

Deferred tax assets 113 123 H

TOTAL NON-CURRENT ASSETS 380,810 344,613

CURRENT ASSETS

Inventories of oils, lubricants and services in course 1,565 1,366 I

Trade receivables 8,237 9,295 L

Other receivables 1,606 1,253 M

Cash and cash equivalents 25,795 43,968 N

Derivative financial instruments 1,962 271 O

Tax assets 762 884 P

TOTAL CURRENT ASSETS 39,927 57,037

TOTAL ASSETS 420,737 401,650




In Euro thousands

SHAREHOLDERS' EQUITY AND LIABILITIES 31-dec-09 31-dec-08 NOTE

SHAREHOLDERS’ EQUITY

Share Capital 30,000 30,000 I1

Legal Reserve 858 833 L1

Translation Reserve 1,440 8,184 M1

Consolidation Reserve 16,192 16,761

Other reserves 20,215 19,739 N1

Cash Flow hedge Reserve 1,702 -346 O1

Fair value reserve of financial assets available-for-sale -988 -1,223 P1

Retained earnings 34,170 17,190 Q1

Net profit for the year 3,181 13,827 R1

TOTAL GROUP SHAREHOLDERS’ EQUITY 106,770 104,965

Minority interest in capital and reserves 27,911 24,466

Minority share of profit/(loss) for the period 299 3,985

TOTAL SHAREHOLDERS’ EQUITY 134,980 133,416

NON-CURRENT LIABILITIES

Bank payables 212,533 194,198 A1

Employees benefits 445 523 B1

Deferred tax liabilities 1 79 C1

Provision for future charges 30 204 D1

CURRENT LIABILITIES

Bank payables 52,498 44,048 E1

Derivative financial instruments 2,251 5,006 O

Trade payables 12,570 17,088 F1

Other payables 5,186 6,308 G1

Tax liabilities 243 780 H1

TOTAL LIABILITIES 285,757 268,234

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 420,737 401,650



CONSOLIDATED INCOME STATEMENT

In Euro thousands

31-dec-09 31-dec-08 NOTE

Revenues 73,709 82,145 1

Operating costs -40,923 -54,327 2

CONTRIBUTION MARGIN 32,786 27,818 3

Overhead costs -8,543 -8,652 4

Other costs and revenues 904 30 5

Result on disposal of vessel 0 14,318 6

EBITDA 25,147 33,514 7

Amortisation & depreciation -17,286 -12,348 8

Provisions for potential losses on current receivables -202 -3 9

EBIT 7,659 21,163 10

Net Financial income (charges) -2,017 -2,299 11

PRE-TAX RESULT 5,642 18,864

Income taxes -111 -592

Deferred tax charges 70 130

NET PROFIT FROM CONTINUING OPERATIONS 5,601 18,402 12

Net result from discontinued operations -2,121 -590 13

NET PROFIT 3,480 17,812


GROUP RESULT 3,181 13,827



STATEMENT OF COMPREHENSIVE INCOME

In Euro thousands Dec 31, 09 Dec 31, 08

Net profit 3,181 13,827

Gains/(losses) on exchange differences on translating foreign operations -3,659 5,428

Gains/(losses) on cash flow hedge 2,048 559

Gains/(losses) on fair value of available-for-sale financial assets 235 -1,341

Total comprehensive income 1,805 18,473

STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY (WITH COMPREHENSIVE

INCOME)

In Euro thousands Dec 31, 09 Dec 31, 08

Initial Equity 104,965 86,492

Comprehensive income 1,805 18,473

- Net profit 3,181 - Gains/(losses) on exchange differences on translating foreign operations -3,659

- Gains/(losses) on cash flow hedge 2,048

- Gains/(losses) on fair value of available-for-sale financial assets 235

Final Equity 106,770 104,965

FINAVAL HOLDING SPA - CONSOLIDATED FINANCIAL STATEMENT AT DECEMBER 31, 2009


STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY

In Euro thousands

Share

capital

Legal

reserve

Traslation

Reserve

Consolidati

on Reserve

Other

reserves

Cash

flow

hedge

reserve

Fair

value

reserve

Retained

earnings Result for

the year Group

shareholder

s' equity

Minority

equity

Totale

Equity

Balance at December 31,

2007 30,000 818 0 15,846 19,459 -905 118 18,396 2,759 86,492 23,532 110,024

Allocation of the 2007 result 15 280 2,464 -2,759 0 0

Change in fair value deriving from hedging and of financial assets available-for-sale net of the tax effect 559 -1,341 -782 -782

Transationa Reserve 8,184 8,184 933 9,117

Other movements 915 -3,671 -2,756 -2,756

Result for the year 13,827 13,827 3,985 17,812

Balance at December 31, 2008 30,000 833 8,184 16,761 19,739 -346 -1,223 17,190 13,827 104,965 28,451 133,416


Change in fair value deriving from hedging and of financial assets available-for-sale net of the tax effect 2,048 235 2,283 2,283

Transationa Reserve -6,744 -569 3,654 -3,661 -540 -4,199

Result for the year 3,181 3,181 299 3,480

Balance at December 31, 2009 30,000 858 1,440 16,193 20,215 1,702 -988 34,170 3,181 106,770 28,210 134,980



FINAVAL HOLDING SPA CONSOLIDATED FINANCIAL STATEMENTS AS AT DECEMBER 31, 2009 IN FUNCTIONAL

CURRENCY (USD)




In Usd thousands

ASSETS 31-dec-09 31-dec-08 NOTE

NON-CURRENT ASSETS

PROPERTY, PLANT & EQUIPMENT

Fleet 489,615 371,584 A

Fleet under construction 17,476 71,830 B

Other assets 3,091 3,390 C

INTANGIBLE ASSETS 15,383 15,380 D

FINANCIAL ASSETS

Subsidies 0 5 E

Other receivables and deposits 3,284 4,056 F

Equity investments 19,583 13,182 G

Deferred tax assets 163 171 H

TOTAL NON-CURRENT ASSETS 548,595 479,598

CURRENT ASSETS

Inventories of oils, lubricants and services in course 2,254 1,901 I

Trade receivables 11,866 12,935 L

Other receivables 2,314 1,744 M

Cash and cash equivalents 37,160 61,190 N

Derivative financial instruments 2,827 377 O

Tax assets 1,098 1,231 P

TOTAL CURRENT ASSETS 57,519 79,378

TOTAL ASSETS 606,114 558,976




In Usd thousands

SHAREHOLDERS' EQUITY AND LIABILITIES 31-dec-09 31-dec-08 NOTE

SHAREHOLDERS’ EQUITY

Share Capital 43,218 41,751 I1

Legal Reserve 1,236 1,159 L1

Translation Reserve 2,724 11,831 M1

Consolidation Reserve 23,327 23,326

Other reserves 29,120 27,471 N1

Cash Flow hedge Reserve 2,453 -482 O1

Fair value reserve of financial assets available-for-sale -1,423 -1,702 P1

Retained earnings 49,223 23,922 Q1

Net profit for the year 3,934 18,803 R1

TOTAL GROUP SHAREHOLDERS’ EQUITY 153,812 146,079

Minority interest in capital and reserves 40,377 34,259


TOTAL SHAREHOLDERS’ EQUITY 194,452 185,674

NON-CURRENT LIABILITIES

Bank payables 306,176 270,265 A1

Employees benefits 641 728 B1

Deferred tax liabilities 2 109 C1

Provision for future charges 43 284 D1

CURRENT LIABILITIES

Bank payables 75,629 61,302 E1

Derivative financial instruments 3,243 6,967 O

Trade payables 18,109 23,781 F1

Other payables 7,471 8,779 G1

Tax liabilities 348 1,087 H1

TOTAL LIABILITIES 411,662 373,302

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 606,114 558,976



CONSOLIDATED INCOME STATEMENT

In Usd thousands

31-dic-09 31-dic-08 NOTE

Revenues 101,960 120,019 1

Operating costs -56,404 -79,742 2

CONTRIBUTION MARGIN 45,556 40,277 3

Overhead costs -11,947 -12,638 4

Other costs and revenues 1,216 35 5

Result on disposal of vessel 0 20,006 6

EBITDA 34,825 47,680 7

Amortisation & depreciation -24,149 -17,909 8

Provisions for potential losses on current receivables -281 -5 9

EBIT 10,395 29,766 10

Net Financial income (charges) -3,196 -4,073 11

PRE-TAX RESULT 7,199 25,693

Income taxes -158 -836

Deferred tax charges 98 180

NET PROFIT FROM CONTINUING OPERATIONS 7,139 25,037 12

Net result from discontinued operations -2,942 -898 13

NET PROFIT 4,197 24,139


GROUP RESULT 3,934 18,803



PROSPETTO DI CONTO ECONOMICO COMPLESSIVO

In Usd thousands Dec 31, 09 Dec 31, 08

Net profit 3,934 18,803

Gains/(losses) on exchange differences on translating foreign operations 585 979

Gains/(losses) on cash flow hedge 2,935 850

Gains/(losses) on fair value of available-for-sale financial assets 279 -1,876

Total comprehensive income 7,733 18,756

STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY (WITH COMPREHENSIVE

INCOME)

In Usd thousands Dec 31, 09 Dec 31, 08

Initial Equity 146,079 127,324

Comprehensive income 7,733 18,756

- Net profit 3,934 - Gains/(losses) on exchange differences on translating foreign operations 585

- Gains/(losses) on cash flow hedge 2,935

- Gains/(losses) on fair value of available-for-sale financial assets 279

0 -1

Final Equity 153,812 146,079



STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY

In Euro thousands

Share

capital

Legal

reserve

Traslation

Reserve

Consolid

ation

Reserve

Other

reserves

Cash flow

hedge

reserve

Fair

value

reserve

Retained

earnings Result for

the year Group

sharehold

ers'

equity

Minority

equity

Totale

Equity

Balance at December 31, 2007 44,163 1,204 280 23,327 28,646 -1,332 174 27,081 3,781 127,324 34,643 161,967


Change in fair value deriving from hedging and of financial assets available-for-sale net of the tax effect 850 -1,876 -1,026 -1,026

Transationa Reserve -2,412 -67 11,551 -1 -1,589 -7,100 383 -384 -1

Other movements 596 596 596

Result for the year 18,802 18,802 5,336 24,138

Balance at December 31, 2008 41,751 1,159 11,831 23,326 27,471 -482 -1,702 23,922 18,803 146,079 39,595 185,674


Change in fair value deriving from hedging and of financial assets available-for-sale net of the tax effect 2,935 279 3,214 3,214

Transationa Reserve 1,467 42 -9,107 1 988 7,194 585 782 1,367

Result for the year 3,934 3,934 263 4,197

Balance at December 31, 2009 43,218 1,236 2,724 23,327 29,120 2,453 -1,423 49,223 3,934 153,812 40,640 194,452



CONSOLIDATED CASH FLOW STATEMENT

In USd thousands

Operating activities Dec 31,09 Dec 31,08

Profit from operating activities 7,139 25,035 Adjustments for:

- Adjustment to financial assets 0 0 - Income taxes -59 -656 - Financial (income)/Charges 3,196 4,073 - Depreciation of non-current tangible assets 24,129 17,834

- Amortisation of intangible assets 19 76 - Employee leaving indemnity provision 375 310 - Provisions for risks and future charges 87 85 - Purchase/sale of fixed assets 0 -20,006

- Result of discontinued operations net of purchase/sale of fixed assets -2,942 -898 - Financial (income)/charges of discontinued operations 0

Cash flow generated from operating activities before working capital changes 31,944 25,853

Financial income/(charges) net of exchange gains(losses) and the IAS 32 and 39

effects -4,084 -10,504

(Increase) / Decrease in trade receivables 1,069 4

Increase/ (Decrease) in trade payables -5,672 9,116

(Increase) / Decrease in inventories -353 671

(Increase) / Decrease of other current assets/liabilities -1,878 -6,134

(Increase) / Decrease in tax receivables and payables -545 1,497

Increase (Decrease) in risks and employee leaving indemnity provision -808 -1,544

Increase / (Decrease) of deferred tax assets and liabilities -98 -612

Cash flow generated from working capital -8,285 2,998

Cash flow generated/(absorbed) from Operating Activities (A) 19,575 18,347

Investing activities

(Investments) / Divestments in intangible assets -23 -18

(Investments) / Divestments in property, plant and equipment -87,507 -212,732

(Investments) / Divestments in financial assets -8,551 7,728

(Investments) / Divestments in non-current assets held-for-sale 113,487

Divestment of discontinued operations 0 0

Cash flow generated/(absorbed) from Investing Activities (B) -96,081 -91,535

Financing activities

Change in bank payables 50,237 92,903

Change in Shareholders' Equity 4,590 -502

Cash flow generated/(absorbed) from Financing Activities (C) 54,827 92,401

Cash flow generated (absorbed) in the year (A+B+C) -21,679 19,213

Effect of the changes in foreign exchange rates (D) -2,351 3,907

Cash and cash equivalents at the beginning of the year (E) 61,190 38,070

Cash and cash equivalents at the end of the year (A+B+C+D+E) 37,160 61,190





FINAVAL HOLDING SPA

Consolidation scope and criteria

Accounting principles and policies



Introduction

The consolidated financial statements for the year ended December 31, 2009 include the financial statements

of Finaval Holding SpA, the Parent Company, those of the subsidiaries of which Finaval Holding SpA owns,

either directly or indirectly, more than 50% of the issued capital, and those of joint ventures.

The consolidated reporting date coincides with the reporting date used by the Parent Company and its

subsidiaries.

When necessary, the interim financial statements of consolidated companies were adjusted to take account

of the accounting policies adopted by the Parent Company.

Given the nature of its business, the Parent Company decided to adopt the US dollar as its functional

currency. The currency translation procedure regarding accounting data as of January 1, 2008 has been

carried out in accordance with IAS 21. Further details are provided below.

All balance sheet data are expressed either in thousands of euros or US dollars, depending on each case.

Basis of consolidation, changes and deconsolidations as of December 31, 2009

Companies consolidated on a line-by-line basis or on a proportionate basis are listed below:

(amounts in Thousands)

Company Consolidation

method

% held Registered

offices

Share Capital

Finaval Holding S.p.A. Line-by-line Holding company Roma Euro 30,000

Finaval S.p.A. (Group) Line-by-line 75% Roma Euro 32,293

Viann Log Lda (Group) Line-by-line 50% Madeira Euro 5

Finaval Offshire S.r.l. Line-by-line 100% Milano Euro 100

Accounting standards and policies, amendments and interpretations applied as of January 1, 2009

On September 6, 2007 the IASB issued a revised version of IAS 1 – Presentation of Financial Statements, which is

due to be applied as of January 1, 2009. The new version of the standard requires any changes arising from

owner transactions must be reported in a statement of changes in equity. All non-owner transactions must be

presented either in a single statement (a "statement of comprehensive income"), or in two separate

statements (an "income statement" and a "statement of comprehensive income"). Other components of

comprehensive income include changes in the cash flow hedge reserve, the reserve for actuarial

gains/(losses) and the currency translation reserve, as well as gains/(losses) on available-for-sale financial

assets. Until now any changes in these components was observable exclusively by examination of the equity

reserves that included them. Adoption of this standard has had no effect on measurement of balance sheet

items. The standard has only affected reclassifications of comparative data to take account of changes

made to balance sheet schedules.



Basis of consolidation at December 31, 2009

Subsidiaries

Subsidiaries are entities over which the Group has the power to directly or indirectly govern the administrative,

management, financial and operating policies of the entity and to obtain the related rewards. Generally

control is assumed to exist when the Group directly or indirectly holds more than half the voting rights.

The assets, liabilities, costs and revenues of consolidated subsidiaries are accounted for on a line-by line basis,

eliminating the carrying amount of the investment against the related share of equity.

All material intercompany payables, receivables, costs and revenues are eliminated.

Any minority interests in equity and profit/(loss) for the period are shown separately in the consolidated

financial statements.

The operating results of subsidiaries acquired or sold during the period are included in the consolidated

income statement from the date on which control is effectively acquired until the effective date on which

control is transferred out of the Group.

Losses and gains from intercompany sales of operating assets are eliminated where material.

Joint ventures

A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic

activity that is subject to joint control. Joint control is the contractually agreed sharing of control over an

economic activity and only exists when strategic financial and operating policy decisions regarding the

activity require the unanimous agreement of the parties who share control. The Group normally accounts for

joint ventures using the proportionate method from the date on which joint control is acquired until such

control is transferred out of the Group.

Investments in associates

An associate is a company over which the Group exercises significant influence, via its power to participate in

the operating and management policy decisions of the investee company which is, however, neither a

subsidiary nor a joint venture.

Investments in associates are accounted for in the consolidated financial statements using the equity method.

Application of the equity method is as follows:

- the carrying amount of investments is aligned with investee company’s equity adjusted, where necessary,

to reflect the application of accounting standards in line with those applied by the Parent Company and,

where applicable, includes the recognition of any goodwill identified on acquisition;

- the Group’s share of the associate’s post-acquisition profits or losses are recognised in the consolidated

income statement from the date that significant influence was acquired and until such influence is

transferred out of the Group. Should, due to losses incurred, the company report negative equity, the

carrying amount of the investment is written off. Provisions are recognised to cover the Group’s share of

any deficit only when the Group has undertaken to incur the associate’s legal or constructive obligations

or to cover the associate's losses. Movements in the associate’s equity that do not derive from its operating

results are accounted for directly as an adjustment to equity reserves;



- unrealised gains on transactions between the Parent Company and subsidiaries and associates are

eliminated to the extent of the Group’s interest in the associate, where considered not immaterial.

Unrealised losses are eliminated unless there is evidence of an impairment.

Compared with the above general policies for consolidating investments, the following should be noted:

� the joint venture Novamar International Scarl (in liquidation) has been accounted for using the equity

method;

� The company Logeco S.r.l. has been accounted for at purchase cost.

� The company laraf S.r.l. has been accounted for at purchase cost.

In this regard, the above investments have not been consolidated using the proportionate method, in that the

consolidation of these investments would, in any event, have been irrelevant for the purposes of presenting a

true and fair view.

Business combinations

Business combinations are accounted for using the purchase method of accounting, as required by IFRS 3.

The cost of the acquisition is determined as the sum of the fair value, at the date of exchange, of the assets

given, the liabilities incurred or acquired, and the financial instruments issued by the Group in exchange for

control of the acquired company. The fair value of the acquired assets and liabilities is compared with the

previously defined cost. The excess of the cost of the acquisition over the fair value of the Group’s share of the

identifiable net assets and contingent liabilities is recognised as goodwill.

If the cost of the acquisition is less than the fair value of the Group’s share of the net assets acquired, the

difference is recognised directly in the income statement.



Accounting standards and policies

The Group's consolidated financial statements for the year ended December 31, 2009 have been prepared

applying accounting policies that are consistent with those of the previous year and in compliance with the

IAS/IFRS issued by the International Accounting Standards Board.

The reason for this decision was that the subsidiary, Finaval SpA, which is by far the largest of the Finaval

Holding Group's consolidated companies, adopted IAS/IFRS for its own separate and consolidated financial

statements in 2007 and would, consequently, not have been in a position to provide accounting data for the

parent's financial statements prepared in accordance with Italian GAAP. We cite, in that regard, paragraph

9.3 of Italian Accounting Standard 17, where it is stated: "...In those cases where parent and subsidiary

companies adopt differing accounting standards, which, although in and of themselves correct, are

inconsistent,...consistency or standardisation may be reinstated on consolidation through consolidation

adjustments designed to reflect the accounting standards adopted by the parent, as reflected in its financial

statements, to the extent that the parent's operations are the predominant part of the group, or of the largest

group company, if the parent alone represents only a small part of group operations..."

Another reason for adopting IAS/IFRS for the consolidated financial statements is the predominance of the

Group's international operations and relationships with corporates, banks and insurance companies located in

countries other than Italy. It was, therefore, considered that the adoption of IAS/IFRS was most suited to the

needs of the users of the Group's financial statements.

Balance sheet items were measured on a going-concern basis and taking account of the economic function

of each component of assets and liabilities.

The financial statements have been prepared on an historical cost basis, with the exception of certain

financial instruments accounted for at fair value.

In the preparation of the consolidated financial statements for the years ended December 31, 2009 and

December 31, 2008 the Group elected to apply the following options permitted by IFRS:

- Financial statements and other schedules: assets and liabilities have been classified as “current/non-

current”, whilst the income statement is classified on the basis of the nature of expenses.

- Cash flow statement: this has been prepared using the indirect method.

- Employee benefits: as required by IAS 19, the Group has elected to account for all cumulative actuarial

gains and losses as at January 1, 2005 and to not adopt the corridor method for actuarial gains and losses

generated and to be generated after such date, believing that actuarial movements do not have such a

significant impact on the income statement to justify recourse to the benefits of using the corridor method.

- Property, plant and equipment and intangible assets: as permitted by IAS 16 (Property, plant and

equipment) and IAS 38 (Intangible assets), these assets continue to be accounted for at cost after initial

recognition.

Foreign currency translation: The functional currency for the Group's consolidated financial statements is

the United States dollar, due to the adoption, in 2008, of the dollar as its functional currency by the

subsidiary, Finaval SpA, which is by far the largest company consolidated in the Finaval Holding Group's

financial statements. This decision was taken in consideration of the effects of the investment and



disinvestment plan implemented during 2008, and decisions made regarding the use of new ships, taking

into account the substantial employment of the fleet via contracts denominated in US dollars, as well as

the fact that the Group's operating costs and financial expenses are primarily incurred in US dollars. These

circumstances thus led to the Parent Company to change its functional currency from the euro to the US

dollar, by applying the relative currency translation procedure regarding accounting data as of January

1, 2008, in accordance with the provisions of IAS 21.

Specifically, the currency translation procedure had the following implications for the Group:

- conversion of all balance sheet items into US dollars using the current exchange rate on the date of

application (January 1, 2008 – 1.4721);

- fixing of amounts converted into US dollars regarding non-monetary assets, such as their historical cost.

Moreover, as it is subject to Italian legislation regarding the keeping of accounting records, the Parent

Company has continued to keep its accounts in euros, whilst converting all amounts into the functional

currency of the US dollar when preparing consolidated financial statements. This is designed to produce

the same effects that would have occurred if the assets had been initially registered in the functional

currency of the US dollar.

Essentially, notwithstanding the registrations made during the year, in preparing the consolidated financial

statements foreign currency transactions (namely those carried out in any currency other than the

functional currency of the US dollar) are recorded using the exchange rates prevailing at the date of the

transaction. Foreign currency monetary assets and liabilities are translated at closing rates. Exchange

differences deriving from the elimination of monetary items or their translation using different rates than

those applied on initial recognition during the period are recognised in the income statement.

- Presentation of financial statements: The Group exercises the right to present consolidated financial

statements in a currency different from the functional currency. In particular, the Parent Company

presents its statutory and consolidated financial statements in euros. Consequently, the accounts

presented in the consolidated financial statements as of and for the year ended December 31, 2009 were

translated into euros, the presentation currency, in accordance with the following procedures:

- assets and liabilities were translated at the closing exchange rate on December 31, 2009 of 1.4406;

- revenues and costs were translated using the exchange rates prevailing at the transaction date;

- depreciation and amortisation were translated using the average exchange rate during the period

they relate to;

- All of the exchange rate differences deriving from the above procedures were recorded in a

separate component of equity called “IAS 21 foreign currency translation reserve”.

The principal accounting policies adopted in the preparation of the consolidated financial statements are as

follows:

- The fleet is accounted for at purchase cost less accumulated depreciation and any impairment losses.

The cost includes the contract price and expenditure that is directly attributable to the asset and incurred

before it was ready for its intended use.

Routine maintenance and repair costs are recognised directly in the income statement as incurred. The

costs deriving from the extension, modernisation or improvement of structural components owned by the



Group or leased from third parties are recognised in the balance sheet only to the extent that they can be

separately classified as an asset or as the component of an asset, applying the component approach.

The cost of replacing a component of a complex asset is capitalised and depreciated over its remaining

useful life, whilst the remaining value of the component replaced is recognised in the income statement.

Ships are subject to periodic withdrawals from service (generally every 30 to 60 months), during which

repair and maintenance costs are incurred. These are capitalised separately and depreciated over the

period between one stay in dry dock and another.

Government subsidies granted to finance investment in the fleet are classified as a direct reduction of the

ships to which the subsidies refer.

Depreciation of the fleet is calculated on the basis of the cost of each vessel, less the estimated net value

deriving from its demolition. Depreciation is applied from the time the asset enters service, based on an

economic and technical life of 25 years. Depreciation for ships entering service during the year is

calculated per day on the basis of the date on which a ship may be considered "available for use",

namely whether it may be used for operations.

- Property, plant and equipment includes the item Fleet under construction, which refers to any amounts

effectively paid, prepayments and initial costs incurred for new ships under construction.

- Buildings, furniture, furnishings, machinery, office equipment and motor vehicles are accounted for at

purchase cost less accumulated depreciation and any impairment losses. The cost includes directly

attributable expenditure incurred in order to make the asset ready for its intended use.

Routine maintenance and repair costs are recognised directly in the income statement as incurred.

Improvement, modernisation and conversion costs that increase the value of the asset are recognised in

the balance sheet.

The following rates of depreciation are used:

Category Criteria Rate %

Buildings Straight-line 3%

Plant and machinery Straight-line 10%

Commercial and industrial equipment Straight- line 15%

EDP Straight- line 20%

Furniture and fittings Straight- line 12%

Motor Vehicles Straight- line 25%

Depreciation is reduced by half for assets purchased during the period, as this represents a reasonable

approximation of the time distribution of purchases during the period.

- Intangible assets are identifiable non-monetary assets without physical substance, which are controlled by

the Group and from which future economic benefits are expected to flow to it. These items are

accounted for at purchase and/or production cost, including directly attributable expenditure incurred in

order to make the asset ready for its intended use, less accumulated depreciation and any impairment

losses.



- Impairment of property, plant and equipment and intangible assets. At each balance sheet date, the

Group reviews the value of its property, plant, equipment and intangible assets with finite lives to assess

whether there is any external or internal indication that an asset may be impaired. If any indication exists,

the Group estimates the recoverable amount of the asset in order to determine the impairment loss to be

recognised in the income statement. When it is not possible to estimate the recoverable amount of an

individual asset, the Group estimates the recoverable value of the cash generating unit to which it

belongs. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. In

calculating value in use, expected future pre-tax cash flow is discounted using a pre-tax rate that reflects

current market assessments of the cost of capital, which embodies the time value of money and the risks

specific to the business. An impairment loss is recognised if the recoverable amount is less than the

carrying amount of the asset. When, subsequently, an impairment no longer exists or is reduced, the

carrying amount of the asset or cash-generating unit is increased to its new estimated recoverable

amount. This reversal must not exceed the carrying amount that would have been determined had no

impairment loss been recognised. The reversal of an impairment loss is recognised immediately in the

income statement.

- Financial assets consist of shareholdings or units that are not held for sale or for trading, as defined by IAS

39, and that qualify as “Available-for-sale financial assets”. These investments are accounted for at fair

value, with any movements in value at the balance sheet date recognised in equity.

- Trade receivables and loans and receivables are initially recognised at fair value and subsequently

measured at amortised cost, using the effective interest method, less provisions for impairment losses. The

amount of the provisions is based on the present value of expected future cash flows.

The amount of the provisions recognised in the income statement is the difference between the carrying

amount of the asset and the present value of estimated future cash flows, discounted using the effective

interest method.

If, subsequently, the circumstances that led to previous impairments, the value of the asset is increased to

the amount that would have resulted from application of the amortised cost had the impairment loss not

been recognised.

The value of receivables is adjusted, where necessary, via the recognition of provisions designed to take

account of the risk of not collecting the receivables.

- Bareboat contracts are usually treated as operating leases and the rentals received and paid recognised

in the income statement on an accruals basis.

Should the contracts qualify as finance leases, pursuant to IAS 17, the lessee accounts for the asset in

property, plant and equipment and recognises a financial liability to the lessor, whilst the lessor eliminates

the assets from its balance sheet and recognises a receivable due from the lessee.

Finally, the principal component of bareboat lease rentals is accounted for as a reduction in the related

payable or receivable, whilst the interest component is taken to the income statement based on the

effective interest method.



- Inventories of oil and fuel are accounted for at the lower of cost, using the weighted average method,

and net realisable value.

The net realisable value is the estimated selling price less the estimated costs necessary in order to make

the sale.

“Services in progress”, which is classified in inventories, refers to the estimated accrued revenues

attributable to the completed portion of voyages in progress at the balance sheet date.

- Cash and cash equivalents include cash at bank and in hand, demand deposits and highly liquid short-

term investments, which are readily convertible into cash and are subject to an insignificant risk of

changes in value. These items are accounted for at fair value and any changes recognised in the income

statement.

- Provisions for staff termination benefits are made to cover the entire accrued liability to staff in

accordance with current legislation and collective labour contracts.

In this regard, in these financial statements the Finaval Holding Group has recognised the accounting

effects of the reform of staff termination benefits introduced by Law no. 296 of December 27, 2006 (the

“Finance Bill 2007”) and subsequent decrees and regulations issued in early 2007. Above all, the Group has

re-calculated the exact value of accrued provisions as of December 31, 2006 and the resulting

“curtailment” in accordance with paragraph 109 of IAS 19. The economic impact of this process was not,

however, material.

- Trade and financial payables are initially recognised at fair value and subsequently measured at

amortised cost, using the effective interest method. Should there be a change in the expected cash flows

and they may be reliably estimated, the amount of the payable is re-calculated to reflect the change on

the basis of the present value of the new expected cash flows and the internal rate of return initially

determined.

- Issued capital represents the Parent Company’s subscribed and paid-up capital. Incremental costs

directly attributable to the issue of new shares are recognised as a reduction of equity, net of any deferred

tax effect.

- The Share premium reserve represents the premium paid in order to subscribe the Company’s issued

capital over and above the par value of the shares. This reserve is not distributable when uncovered

accumulated losses are present.

- The Legal reserve consists of the annual portion of the Parent Company’s profit for the year (5% each year

until the reserve is equal to 20% of the issued capital) and may be used solely to cover losses.

- IAS 21 foreign currency translation reserve reflects changes deriving from the translation of balance sheet

and income statement items from the functional currency (US dollar) to the presentation currency (euro),

including:



- translation of costs and revenues at exchange rates prevailing at the date of transactions, and of

assets and liabilities at closing rates;

- translation of opening assets at a closing rate that differs from the previous closing exchange rate.

- Other reserves consist of both revenue and capital reserves with specific purposes.

- Retained earnings (accumulated losses) represent earnings or losses from previous years that have neither

been distributed or taken to reserves (in the case of earnings) or not covered (in the case of losses).

Additionally, these items include transfers from other equity reserves carried out when these reserves are

no longer subject to prior restrictions.

- The Group benefits from subsidies pursuant to art. 11 of Law no. 234/89, which are considered to be grants

related to income. Such grants are recorded in the income statement in the year to which they relate.

In addition, the Company benefits from state subsidies in favour of the shipping industry in accordance

with Law no. 361/82, integrated by Law no. 848/84, Law no. 234/89 (arts. 1 and 9) and Law no. 132/94 (art.

10). These subsidies are accounted for on formal allocation by the relevant government entity, and are

classified as a direct reduction in the value of the ships to which they refer and recognised in the income

statement as a reduction in the related depreciation.

Subsidies regarding ships that have been fully depreciated or that are no longer owned by the Group are

recognised in the income statement as income. Government subsidies are accounted for in assets if,

regardless of formal allocation by the relevant government entity, there is reasonable certainty that the

Company that will benefit will satisfy the conditions for allocation and the subsidies will be received.

- Revenues from the chartering of company ships and transport services are recognised on completion of

the service.

Revenues from the sale of goods are recognised when the significant risks and rewards of ownership of the

goods have been transferred to the buyer.

So-called “Services in progress” refer to voyages in progress at the balance sheet date, for which the

Group has estimated the costs and revenues to be accounted for in relation to the portion of the voyage

completed at the balance sheet date. This estimate is based on the expected duration of the voyage, the

destination, and expected fuel consumption and port expenses.

As a rule, charter contracts contain specific terms and conditions governing loading and unloading

operations between one voyage and another, establishing the maximum permitted duration. Once these

contractually determined time limits have been exceeded, the shipping company has the right to be

reimbursed for the period spent in port in excess of the time contractually agreed. This form of revenue is

known as “demurrage”.

- The costs incurred by the Group in carrying out its business are recognised in the income statement when

they relate to goods and services purchased or consumed during the period, or are systematically

allocated when it is not possible to identify the future utility.



- Routine fleet maintenance costs are incurred in order to keep the fleet in good working order, and are

recognised in the income statement as incurred.

- Dividends are recognised when the right to receive payment is established. Dividends payable are

recognised as a liability on approval by the Ordinary General Meeting of shareholders that approves the


- Current taxes are calculated on the basis of the tax regulations in force at the balance sheet date. As of

January 1, 2006, the Company Finaval S.p.A. formally adhered to the new revenue taxation system for

shipping companies, known as the “Tonnage Tax”. Adoption of the new regime is optional but is binding

for all the Group’s ships for a period of ten years. Adoption of the new regime is optional but is binding for

all the Group’s ships for a period of ten years. Under this tax regime, income subject to IRES, deriving from

the use for international transport of the ships enrolled on the Register established by Law no. 30 of

February 27, 1998 (setting up the International Register), is calculated on a lump-sum basis in accordance

with the net tonnage of the fleet, as provided for by articles 155 to 161 of the Consolidated Income Tax

Act. The lump-sum determination of taxable income also takes account of any gains realised on the sale

of ships, with certain specific limitations relating to the vessels owned at the date of adopting the new

regime. In view of the fact that the ships owned by the Group Finaval enrolled on the Register established

by Law no. 30/1998 are not used by the Group for international transport, the “Tonnage Tax” regime is not

applicable. In any event, the Group qualifies for the tax relief granted by Law no. 30/1998, which provides

for full exemption from IRAP and an 80% reduction in taxable income for the purposes of IRES. Deferred tax

assets and liabilities are calculated on temporary differences arising between the tax bases of assets and

liabilities and their carrying amounts. Deferred tax assets, including those deriving from the carry forward of

tax losses, are only recognised to the extent that it is probable that future taxable profit will be available

against which the asset can be utilised.

- Borrowings are initially accounted for at face value, less transaction costs incurred.

- The Group uses derivative financial instruments essentially to hedge interest and exchange rate risks. Based

on IFRS requirements, derivative financial instruments may only be accounted for using hedge accounting

when:

- there is formal designation and documentation of a hedge at inception;

- the hedge is expected to be highly effective;

- hedge effectiveness is reliably measurable;

- the hedge is highly effective during the accounting periods for which it has been so designated.

All derivative financial instruments are initially recognised at fair value. Subsequently, financial instruments

that qualify for hedge accounting and whose effectiveness has been verified, are accounted for using

the following treatments:

1. Fair value hedges – If a derivative financial instrument is designated as a hedge of the exposure to

changes in the fair value of a recognised asset or liability that is attributable to a particular risk and

could have an effect on the income statement, any gains or losses arising from changes in fair value

after initial recognition are accounted for in the income statement. Gains or losses on the hedged item,



attributable to occurrence of the risk, result in a change to the carrying amount of the item and are

accounted for in the income statement.

2. Cash flow hedges - If a derivative financial instrument is designated as a hedge of the exposure to

the variability of the cash flows of a recognised asset or liability, or of a highly probable transaction, and

such variability could have an effect on the income statement, the effective portion of gains or losses

on the financial instrument is recognised in a specific equity reserve. Accumulated gains or losses

posted to equity are taken to the income statement in the same period in which the hedged

transaction is accounted for. Gains or losses associated with a hedge or the ineffective portion of a

hedge are immediately recognised in the income statement. If a hedging instrument or the hedge

relationship is wound up, but the hedged transaction has still to be realised, the accumulated gains and

losses, until that time posted to equity, are recognised in the income statement when the transaction is

realised. If the hedged transaction is no longer expected to occur, gains and losses that have yet to be

realised, and which have been posted to equity, are immediately recognised in the income statement.

Derivative financial instruments that, despite proving to be effective in reducing exposure to financial risks,

based on the guidelines in the Group’s “Risk management policy”, do not qualify, pursuant to IAS 39, for

hedge accounting, are accounted for at fair value, and the related changes recognised directly in the

income statement.

- Segment reporting – The Finaval Holding Group operates in the transport and logistics segments for energy

products through four Business Units:

� Crude Oil: sea transportation of crude oil;

� Products: sea transportation of petroleum derivative products;

� Logistics;

� Engineering.

The Logistics Business Unit is further subdivided into two segments: coal logistics and project forwarding.

Although the businesses of the two segments are separately described in the Management Report, their

results are combined in the financial statements.

- During 2006, the Group began the process of disposing of its gas tanker fleet. The Group, however,

continues to operate in this segment with five tankers not yet sold at the end of 2006, as well as two tankers

chartered on a bareboat basis. At December 31, 2009 the Group had terminated its operations in the gas

segment.

During 2009 the Group began the process of discontinuing its operations in the Small Product by putting

the company Cabofin into liquidation. At December 31, 2009 the Group's operations in the Small Product

segment were limited to a single chartered vessel which will be returned in 2010.

From a geographical viewpoint, the Group operates in one segment since it considers the world to be one

big market. This is confirmed by the fact that no ships are specifically employed in certain geographical

areas.



Critical accounting estimates and judgements

Preparation of the IFRS consolidated financial statements requires management to make estimates and

assumptions, which are reflected in the measurement of the carrying amounts of assets and liabilities and in

the disclosures provided in the financial statements as a whole. The amounts actually recognised may,

therefore, differ from these estimates and assumptions. Moreover, these estimates and assumptions are

periodically reviewed and updated, and the resulting effects of each change immediately recognised in the






FINAVAL HOLDING SPA

Notes to the consolidated financial

statements

for the year ended December 31, 2009



As previously described in “Accounting standards and policies”, the Group adopted the US dollar as its

functional currency as of January 1, 2008.

The Group applied the closing euro/dollar exchange rate on December 31, 2007 of 1.4721 in the translation

procedure.

The Company used the euro as the presentation currency in the preparation of financial statements.

Consequently, the accounts presented in the consolidated financial statements as of and for the year ended

December 31, 2008 were translated into euros, the presentation currency, in accordance with the following

procedures:

� assets and liabilities were translated at the closing exchange rate on December 31, 2008 of 1.4406;

� revenues and costs were translated using the exchange rates prevailing at the transaction date;

� depreciation and amortisation were translated using the average exchange rate during the period

they relate to;

� all of the exchange rate differences deriving from the above procedures were recorded in a separate

component of equity called “IAS 21 foreign currency translation reserve”.

The amount of this reserve reported in the financial statements (presented in euros) has been affected by the

following:

� translation of costs and revenues at exchange rates prevailing at the date of transactions, and of assets

and liabilities at closing rates;

� changes in the initial value of equity, due to application of different opening and closing exchange

rates.

Changes in the IAS 21 foreign currency translation reserve break down as follows:

Transation Reserve

Net Bilance 01.01.09 (Euro/000) 8,184

changes in the opening net equity -6,322

translation of the revenues and costs at the exchange rates at the transaction dates -422

Net Bilance 31.12.09 (Euro/000) 1,440

In order to facilitate analysis of the financial statements, the figures in the following Notes are presented in

accordance with the following criteria:

� in balance sheet schedules changes between the opening and closing balances are reported in the

functional currency, whilst equivalent amounts in euros are only shown for the opening and closing

balances;

� balance sheet items regarding stocks, and income statement items are presented in two separate sets of

schedules, one in euros and the other in US dollars.

� figures in the Notes are usually reported in the functional currency and in limited cases in the presentation

currency, depending on the nature of the operational data reported.



It should be noted that the figures relating to single components in the following tables and schedules may be

different from the aggregate amounts shown in the financial statements. This is due to the rounding off of

amounts carried out at various stages of calculation.

NOTES TO THE BALANCE SHEET

on-current assets

Property, plant and equipment

Fleet (Note A)

As of December 31, 2009 this item amounts to 489,615 thousand euros and represents the carrying amount of

the ships owned by the Group, recognised less accumulated depreciation and including the capitalised cost

of periodic stays in dry dock, which are depreciated over the period between one stay and another.

Changes in this item break down as follows:

Net balance

1.1.09

(Euro/000)

Net balance

1.1.09

(Usd/000)

Purchases

(Usd/000) Depreciation

Net balance

31.12.09

(Usd/000)

Net balance

31.12.09

(Euro/000)

Fleet (historical cost) 317,330 441,628 141,835 583,463 405,014

Fleet (acc. deprec.) -46,382 -64,550 -24,242 -88,792 -61,636

Total fleet 270,948 377,078 141,835 -24,242 494,671 343,378

Ship purchase grants -3,948 -5,494 438 -5,056 -3,510

Total net fleet 267,000 371,584 141,835 -23,804 489,615 339,868

The net increase of 118,031 thousand US dollars, compared with the figure reported as of December 31, 2008,

is essentially due to the combined effect of the following transactions:

- new investment, including capitalised dry dock costs, of 141,850 thousand US dollars, which breaks down

as follows:

- 136,374 thousand US dollars regarding the purchase of 2 sister Aframax vessels with a DWT of 114,000,

called “Neverland Angel” and “Neverland Sun”;

- 4,502 thousand US dollars regarding dry dock costs incurred in relation to the vessels, “Isola Verde”,

“Isola Magenta” and “Angelica”;

- 973 thousand US dollars for improvements to the existing fleet.

- depreciation for the year amounting to 23,804 thousand US dollars (including 110 thousand US dollars

regarding the depreciation of dry dock costs for gas tankers reclassified under the item "Profit/(loss) from

discontinued operations”).

Fleet under construction (Note B)

This item, amounting to 17,476 thousand US dollars as of December 31, 2009, consists of advance payments

made to Samsung Heavy Industries and the initial costs incurred (primarily studies and analyses for designs,

preparation of the site office, finance costs and fees) regarding the construction of two new oil tankers to be

delivered in 2010 and 2011.

As of December 31, 2008, the balance of this item amounted to 71.8 million US dollars.



Changes in this item break down as follows:

Fleet under costruction

Net bilance at 01.01.09 (Euro/000) 51,613

Net bilance at 01.0109 (Usd/000) 71,830

Increase -54,354

Net bilance at 31.12.09 (Usd/000) 17,476

Net bilance at 31.12.09 (Euro/000) 12,131

A net decrease of 54,354 thousand US dollars compared with the figure reported as of December 31, 2008,

essentially due to the delivery of the 2 sister Aframax vessels with a DWT of 114,000, called “Neverland Angel”

and “Neverland Sun”;

Other assets (Note C)

This category includes all other items of property, plant and equipment, consisting of buildings, plant and

machinery, equipment, electronic office equipment, furniture, fittings and motor vehicles, which are shown less

the related accumulated depreciation.

Other assets

01.01.09

(Euro/000)

01.01.09

(Usd/000)

Change

(Usd/000)

31.12.09

(Usd/000)

31.12.09

(Euro/000)

Land and buildings 1,322 1,840 -62 1,778 1,235

Plant and machinery 54 75 -4 71 49

Other equipment 2 3 -2 1 1

Other assets 1,058 1,472 -231 1,241 861

Total 2,436 3,390 -299 3,091 2,146

Changes in this item during the period break down as follows:

( In Usd thousands)

beginning balance Movements during the period ending balance

Historical

cost

Accum.

Deprec.

Balance

2008

Historical

cost

Accum.

Deprec.

Balance

2008 Historical cost

Accum.

Deprec.

Balance

2008

Historical

cost

Land and buildings 2,054 214 1,840 - 61 2,054 276 1,778

Plant and machinery 57 -17 75 3 6 60 -11 71

Other equipment 246 243 3 11 13 257 256 1

Other assets 3,183 1,711 1,472 123 -9 -9 354 3,297 2,056 1,241

Total 5,540 2,151 3,390 137 -9 -9 434 5,668 2,576 3,091

It should be borne in mind that in the valuation of property, plant and equipment subsequent to initial

recognition, the historic cost criterion was maintained (instead of fair value).



Intangible assets (Note D)

Changes in intangible assets during 2009 break down as follows.

Intangible assets

Balance at December 31, 2008 (Euro/000) 11,051

Balance at December 31, 2008 (Usd/000) 15,380

Increases 22

Amortisation -19

Balance at December 31, 2009 (USd/000) 15,383


As of December 31, 2009 intangible assets amount to 15,383 thousand US dollars, registering an increase of 3

thousand US dollars with respect to the previous year.

“Other intangible assets” regard the cost of purchasing software.

The intangible assets are mainly composed by “Consolidation differences”, related to subsidiary Finval S.p.A..

Financial assets

Financial assets accounted for in the balance sheet include “Government grants receivable”, “Other

receivables and guarantee deposits”, “Investments” and “Deferred tax assets”.

Government grants receivable (Note E)

Government grants receivable represent the present value of amounts still to be collected from the

government to fund the purchase, construction or demolition of new ships. The composition of these

receivables in 2008 and 2009 breaks down as follows:

Value in Euro Value in Usd

31/12/2008 31/12/2009 Var. Subsidies 31/12/2008 31/12/2009 Var.

4 0 -4 Receivables for subsidies within 12 months 5 0 -5

4 0 -4 Total 5 0 -5

Following collection of government grants reported as of December 31, 2008, amounting to 5 thousand US

dollars, the balance of this item reduced to zero.

Other receivables and guarantee deposits (Note F)

For the periods ending December 31, 2009 and December 31, 2008, this item breaks down as follows:


31/12/2008 31/12/2009 Var. 31/12/2008 31/12/2009 Var. 31/12/2008

347 1,180 833 Guarantee deposits 483 1,700 1,217

359 0 -359 Restricted current accounts 500 -500

2,208 1,100 -1,108 Other receivables 3,073 1,584 -1,489

2,914 2,280 -634 Total 4,056 3,284 -772



"Other receivables" includes a loan to Sky Express Aviation (Cargo) Limited relating to the deferred payment

terms granted to the Company on the sale of the shareholding in Finaval Aviation Srl and the transfer of the

related shareholder loan. The loan, which is non-interest bearing, will be repaid at fixed dates in the future and

has, therefore, been measured at present value using a market discount rate with implicitly accrued interest

being recognised through profit or loss.

Equity Investments (Note G)

This item consists of investments in unconsolidated subsidiaries, associates and joint ventures, in addition to the

Group’s shareholding in Shares, which is measured at fair value.

Investments break down as follows as of December 31, 2009 and December 31, 2008:

31/12/2008 31/12/2008 Increase Other movments 31/12/2009 31/12/2009 Equity investments

% (Euro/000) (Usd/000) (Usd/000) (Usd/000) (Usd/000) (Euro/000)

Novamar Int. Scarl in Liq. 50,00% 994 1,384 - -12 1,372 952

Logeco S.r.l. 33,30% 0 0 - 0 0

Laraf S.r.l. 30,00% 0 0 4 4 3

Sofipart S.r.l. 29,20% 6,193 8,620 4,228 12,848 8,919

Global Disb. & Acc. Solution 25,00% 72 100 - 100 70

Subtotal 7,259 10,104 4 4,216 14,324 9,944

Shares BPER 2,212 3,078 575 338 3,991 2,770

Shares ENEL 408 57 465 323

Shares IKF SPA 174 16 190 132

Shares Abercrombie & Fitch 220 -31 189 131

Shares Maire Technimont 425 -1 424 294

Subtotal 2,212 3,078 1,802 379 5,259 3,650

Totale Equity investments 9,472 13,182 1,806 4,595 19,583 13,594

The information required by article 2427, paragraph 5, of the Italian Civil Code is reported below.

Equity investments % held Registered

offices

Share

Capital Equity

Result

(loss)

Value in

financial

statement

Novamar Int. Scarl 50% Napoli 1,540 Euro 1,901 Euro 0 774

Logeco S.r.l. 33% Milano 52 Euro N/A N/A 0

Laraf S.r.l. 30.00% Roma 3 Euro 3 Euro -1 3

Sofipart S.r.l. 29.20% Roma 81 Euro 1,440 Euro -68 1,785

Global Disb. & Acc. Solution 25% Hyderaba, India 15,691 INR 9,796 INR (4,472) INR 69

As already mentioned, the securities recorded in the balance sheet, amounting to 5,259 thousand US dollars

as of December 31, 2009 (3,078 thousand US dollars as of December 31, 2008), refer to shares which are

classified as available-for-sale financial assets and, in application of IAS 39, recognised at fair value through

equity.



Deferred tax assets (Note H)

Deferred tax assets break down as follows:

Temporary differences Amount Average rate 2009 2008 Change Income statement

IRES

- Sales representatives expenses 45 5.50% 3 5 2 2

- loss 350 27.50% 96 70 -26 -26

- bring up to date of Receivables 30 27.50% 9 37 28 25

IRAP

- Sales representatives expenses 135 5 11 6 6

Total deferred tax assets at 31.12.2009 (Euro/000) 113 123 10 7

Total deferred tax assets at 31.12.2009 (Usd/000) 163 171 8 10

Current assets

Inventories of fuels, lubricants and services in progress (Note I)

This item consists of fuels and lubricants on board ships at the end of the period, accounted for at the lower of

cost, using the weighted average method, and market value.

This item breaks down as follows:


31/12/2008 31/12/2009 Var. Inventories 31/12/2009 Var. 31/12/2008

1,366 1,559 193 Raw material, ancillary and consumables 1,901 2,245 344

0 6 6 Work in progress 0 9 9

1,366 1,565 199 Total 1,901 2,254 353

The value of closing inventories is up 353 thousand US dollars at the end of 2009, compared with the end of

2008, reflecting a combined increase in the volume of bunkerage and lubricants in stock at the end of the

period.

Trade receivables (Note L)

This item includes the portion of trade receivables due from customers, joint ventures, parent companies and

affiliates within 12 months.


31/12/2008 31/12/2009 Var. Trade receivables 31/12/2008 31/12/2009 Var.

9,137 8,080 -1,057 Trade receivables 12,716 11,639 -1,077

158 157 -1 Receivables from subsidiary and associated companies 219 227 8

9,295 8,237 -1,058 Total 12,935 11,866 -1,069

Amounts due from customers include trade receivables at the end of the period for charters, demurrage and

sundries. They derive from normal transport and chartering transactions, adjusted to reflect their estimated

realisable value by means of provisions for bad debts of 192 thousand US dollars.

Amounts due from associates regard a receivable due from Logeco Srl.



Other receivables (Note M)

This item breaks down as follows as of December 31, 2009 and December 31, 2008:


31/12/2008 31/12/2009 Var. Other receivables 31/12/2008 31/12/2009 Var.

617 1,056 439 Other receivables 859 1,522 663

190 334 144 Accrued income 266 481 215

446 216 -230 Prepayments 619 311 -308

1,253 1,606 353 Total 1,744 2,314 570

Sundry receivables essentially regard amounts due from insurance companies to cover the cost of damage to

and breakdowns of ships. Prepayments primarily relate to insurance.

Cash and cash equivalents (Note N)

This item consists of deposits in the Group’s bank and post office current accounts, held at individual institutions

with whom the Group engages in specific relations, and cash in hand.

The reduction of 24,030 thousand US dollars with respect to December 31, 2008 is primarily due to liquidity

deriving from purchases and disposals during the year.

Derivative financial instruments (Note O)

Derivative assets and liabilities in the financial statements for the year ended December 31, 2009 break down

as follows.

ASSETS FOR DERIVATIVE INSTRUMENTS Notional Accounting

treatment

Fair Value

(Usd/000) Fair Value (Euro/000)

DERIVATIVES ONINTEREST RATES

IRS USD 12,500 CFH 521 362

IRS STEP UP 2011-2016 USD 7,600 CFH 76 53

IRS USD 10,489 CFH 471 327


IRS 2011-2018 USD 13,000 CFH 119 82

IRS 2011-2018 USD 13,425 CFH 78 54

IRS USD 10,056 CFH 597 415


IRS USD 9,648 CFH 573 398


FOREIGN EXCHANGE DERIVATIVES

CURRENCY SWAP USD 1,300 CFH 49 34




CURRENCY SWAP USD 500 CFH 11 8


TOTAL ASSETS FOR DERIVATIVE FINANCIAL INSTRUMENTS 2,827 1,962

As of December 31, 2008 total derivative assets amounted to 271 thousand euros.



LIABILITIES FOR DERIVATIVE FINANCIAL INSTRUMENTS Notional

Accounting

treatment

Fair Value

(Usd/000) Fair Value (Euro/000)

DERIVATIVES ONINTEREST RATES IRS STEP UP WITH K-OUT USD 13,100 FVH 1,305 906

IRS STEP UP WITH K-OUT USD 13,100 FVH 1,316 914

COLLAR WITH K-IN FLOOR USD 5,671 FVH 219 152

KNOCK IN COLLAR STEP UP EUR 1,999 FVH 53 37

IRS STEP UP WITH K-OUT USD 3,775 FVH 174 120

IRS USD 1,667 CFH 62 43

IRS USD 833 CFH 24 17

COLLAR USD 1,500 CFH 58 40

IRS USD 1,500 CFH 32 22

TOTAL LIABILITIES FOR DERIVATIVE FINANCIAL INSTRUMENTS 3,243 2,251

Accounting treatment key:

FVH: Fair value hedge: Gains or losses on the hedged item, attributable to occurrence of the risk, result in a

change to the carrying amount of the item and are accounted for in the income

statement.

CFH: Cash flow hedge: the effective portion of gains or losses on the financial instrument is recognised in a

specific equity reserve.

As of December 31, 2008 total derivative assets amounted to 5,006 thousand euros.

Tax assets (Note P)

Tax assets of 762 thousand euros (1.098 thousand US dollars) as of December 31, 2009 and of 884 thousand

euros (1.231 thousand US dollars) as of December 31, 2008 primarily regard advance payments of IRAP during

the respective tax periods.



Non-current liabilities

Bank borrowings (Note A1)

This item includes bank borrowings falling due after 12 months. Bank borrowings falling due within 12 months

are classified as “Current liabilities”.

This item breaks down as follows as of December 31, 2009 and December 31, 2008:

Medium/long-term bank payables


Balance at December 31, 2008 (Usd/000) 270,265

Variation 35,911

Balance at December 31, 2009 (USd/000) 306,176


Compared with the previous year the following new mortgage loans have been taken out:

- Deutsche ShiffsBank (50,000 thousand US dollars) to finance the purchase of the Neverland Angel;

- Royal Bank of Scotland (50,000 thousand US dollars) to finance the purchase of the Neverland Sun.

The Finaval Group’s bank borrowings as of December 31, 2009 break down as follows:

(value in Usd/000)

Lender Duration Curr. Balance at

31/12/2008

Short-

term

portion

Medium/Long

term portion

Fortis Bank in pool 01/10/2015 USD 32,200 5,400 26,800

National Bank of Greece 08/04/2018 USD 31,654 2,288 29,366

Monte dei Paschi 03/04/2020 USD 42,593 2,937 39,656

Intesa – San Paolo 30/06/2018 USD 37,250 3,350 33,900

Unicredit 29/12/2019 USD 41,500 2,800 38,700

Deutsche ShiffsBank 23/10/2023 USD 40,124 2,830 37,294

Deutsche ShiffsBank 31/12/2013 USD 46,666 3,333 43,333

Royal Bank of Scotland 02/04/2024 USD 47,750 3,000 44,750

Interbanca 28/02/2011 EUR 6,483 4,322 2,161

Banco di Roma 30/06/2013 EUR 5,854 4,674 1,180

Antonveneta 15/06/2010 EUR 1,201 1,201 0

Antonveneta 17/10/2010 EUR 4,802 4,802 0

Banca Popolare di Vicenza 30/06/2013 EUR 6,256 1,737 4,519

Unicredit 30/06/2015 EUR 1,017 172 845

Banca Popolare Emilia Romagna 05/12/2013 Eur 5,915 1,361 4,554

Commissions -1,080 -196 -882

Medium/long term bank loans 350,187 44,011 306,176

The following information regards the principal existing loans as of December 31, 2009.



Fortis Bank (syndicated)

In 2004 the Group restructured the debt associated with its Product segment ships. This was done in

collaboration with Fortis Bank SA of Rotterdam, which acted as the agent bank for a syndicate of banks. This

transaction entailed repayment of all pre-existing debt, and the undertaking of a new mortgage that originally

amounted to 56,500 thousand US dollars. In 2005, when Finaval purchased the Neverland, the loan was

increased by 42,200 thousand US dollars and certain clauses in the contract renegotiated, resulting in an

extension of maturity dates.

The current contract envisages declining quarterly repayments of principal and a floating rate of interest

indexed to 3-month USD Libor. The loan matures in October 2015, at which time a balloon payment of 11,800

thousand US dollars is due. The contract is secured by collateral on the ships covered by the loan.

National Bank of Greece

This loan, originally amounting to 70,000 thousand US dollars, was granted to Naftilos A. Marine Ltd and

Angelica Shipping Ltd by the National Bank of Greece on April 8, 2008. It is secured by collateral on the ships

covered by the loan (the Naftilos An and Angelica).

The contract provides for quarterly straight-line repayments and a floating rate of interest indexed to 3-month

USD Libor.

Monte dei Paschi

This loan, originally amounting to 47,000 thousand US dollars, was granted to Finaval SpA by Monte dei Paschi

Capital Services on May 20, 2008 and is secured by collateral on the ship covered by the loan (the Isola

Bianca).


USD Libor.

Intesa - Sanpaolo

This loan, originally amounting to 40,600 thousand US dollars, was granted to Finaval Tanker Srl by Intesa – San

Paolo on July 7, 2008 and is secured by collateral on the ship covered by the loan (the Isola Celeste).

The contract provides for six-monthly straight-line repayments and a floating rate of interest indexed to 6-month

USD Libor.

Unicredit Corporate Banking

This loan, originally amounting to 45,000 thousand US dollars, was granted to Finaval SpA by Unicredit

Corporate Banking on July 22, 2008 and is secured by collateral on the ship covered by the loan (the Isola Blu).


USD Libor.



Deutsche ShiffsBank

This loan, originally amounting to 42,955 thousand US dollars, was granted to Finaval Shipping Srl by Deutsche

ShiffsBank on October 23, 2008 and is secured by collateral on the ship covered by the loan (the Isola Corallo).


USD Libor.

Deutsche ShiffsBank

This loan, amounting to 50,000 thousand US dollars, was granted to Finaval SpA by Deutsche ShiffsBank on

January 28, 2009 and secured by collateral on the ship covered by the loan (Neverland Angel).


USD Libor.

Royal Bank of Scotland

This loan, originally amounting to 50,000 thousand US dollars, was granted to Finaval SpA by Royal Bank of

Scotland on March 6, 2009 and is secured by collateral on the ship covered by the loan (the Neverland Sun).


USD Libor.

Interbanca

This unsecured loan, originally amounting to 15,000 thousand euros, was granted to the Parent Company on

March 14, 2006. The contract provides for six-monthly repayments maturing in February 2011. Interest is payable

at a rate indexed to 6-month Euribor.

Banca di Roma

This unsecured loan, amounting to 15,000 thousand euros, was granted to the Parent Company on February 16,

2006, and is secured by a surety granted by Finaval's Parent Company. The contract provides for six-monthly

repayments maturing in February 2011. Interest is payable at a rate indexed to 6-month Euribor.

Banca Antonveneta

This unsecured loan, originally amounting to 15,000 thousand euros, was granted to the Parent Company in

2007. The contract provides for six-monthly repayments and interest payable at a rate indexed to 6-month

Euribor.

Banca Popolare di Vicenza

This unsecured loan, originally amounting to 6,000 thousand euros, was granted to the Parent Company on

January 29, 2008. The contract provides for six-monthly repayments maturing in June 2013. Interest is payable at

a rate indexed to 6-month Euribor.



Unicredit - Property in Milan

This unsecured loan, originally amounting to 1,200 thousand euros, was granted to the Parent Company on July

1, 2005. The contract provides for quarterly repayments maturing in June 2015. Interest is payable at a rate

indexed to 3-month Euribor.

Banca Popolare Emilia Romagna

Loan originally of 5,000 thousand euros under a loan agreement signed in December 2007. Disbursement and

repayment schedules:

• Total of 5 million euros available for drawdown from date of loan signing to December 31, 2008;

• repayments over five years from 2009.

Interest is charged on all the above borrowings at a floating rate plus a spread. Exposure to interest rate risk has

been hedged, primarily in the form of Interest Rate Swaps with a notional value equal to approximately 50% of

the remaining debt.

Employee benefits (Note B1)

These provisions regard accrued staff termination benefits calculated in accordance with IAS 19.

Indeed, according to international accounting standards, staff termination benefits are considered to be post

employment-benefits of the defined-benefit plan type, which for accounting purposes are calculated using

the projected unit credit method.

Changes in the present value of the related obligations are as follows:

EMPLOYEE LEAVING INDEMNITY

Opening balance i n the present value of the defined benefit obligation at December 31, 2008

523

Current service cost -

Financial charges on obligations undertaken 24

Benefits paid in 2009 (216)

Present value of the defined benefit obligation at December 31, 2009 331

Net actuarial profit/(loss) recognised in the year 114

Closing balance in the present value of the defined benefit obligation at December 31, 2009

(Euro/000) 445

As previously mentioned in “Basis of consolidation”, the Group has decided not to use the corridor method for

gains and losses generated after January 1, 2005 and to account for all accumulated actuarial gains and

losses at that date.

Average workforce

The average workforce during 2009 and 2008, broken down by category and including shipboard personnel, is

as follows:



Average number of employees 31/12/2008 31/12/2009 Change.

Executives 4 5 1

Ashore personnel 33 29 -4

Seagoing personnel 2631 2061 -57

Total average personnel 300 240 -60

Note 1: The data indicated includes Crew referring to the Companies Naftilos A.M. Ltd and Angelica Shipping Ltd, consolidated

proportionally.

Deferred tax liabilities (Note C1)

Provisions for deferred tax liabilities break down as follows:


31/12/2008 31/12/2009 Var. Temporary differences 31/12/2008 31/12/2009 Var.

54 0 -54 Deferred gains on disposals 75 0 -75

25 1 -24 - Other net temporary differences 34 2 -32

79 1 -78 Total 109 2 -107

Following the complete reversal of all previously reported temporary differences in 2009, this item was reduced

to zero, as shown in the table below.

Temporary differences Amount Average rate 2009 2008 Ch’ange Income statement

IRES income taxes

- Deferred gains on disposals 0 54 54 54

- Other net temporary differences 1 25 24 24

Deferred tax liability at 31.12.2009 (Euro/000) 1 79 78 78

Deferred tax liability at 31.12.2009 (Usd/000) 2 109 107 107

Provisions (Note D1)

Provisions break down as follows:


31/12/2008 31/12/2009 Var. Risks and future charges 31/12/2008 31/12/2009 Var.

118 0 -118 Risks on investments – Novamar Int. Holland 164 0 -164

0 30 30 Future personnel costs - 43 43

86 0 -86 Interest calculated on terminated Mare

Glaciale and Capo Horn loan 120 0 -120

204 30 -174 Total 284 43 -241

Current liabilities

Bank borrowings (Note E1)

This item includes advances from banks, short-term portions of medium/long-term mortgage loans and short-

term loans.



The item breaks down as follows:


31/12/2008 31/12/2009 Var. Short-term bank payables 31/12/2008 31/12/2009 Var.

53 2,632 2,579 Advances 78 3,792 3,714

27,549 30,550 3,001 Mortgages 40,555 44,011 3,456

24,460 19,316 -5,144 Bank loans 36,007 27,826 -8,181

52,062 52,498 436 Total 76,640 75,629 -1,011

Trade payables (Note F1)



31/12/2008 31/12/2009 Var. Trade payables 31/12/2008 31/12/2009 Var.

16,160 11,579 -4,581 Trade payables 22,491 16,681 -5,810

928 841 -87 Payables to subsidiary and associated companies 1,290 1,212 -78

0 150 150 Payables to holding companies 0 216 216

17,088 12,570 -4,518 Total 23,781 18,109 -5,672

The decrease in amounts due to suppliers almost entirely derives from the payment, in January 2009, of a

portion of the advances payable in relation to construction of the M/T Neverland Sun.

Other payables (Note G1)

This item primarily regards prepayments from customers falling due within 12 months, amounts due to social

security institutions, and other payables, accrued expenses and deferred income falling due within 12 months.



31/12/2008 31/12/2009 Var. Other payables 31/12/2008 31/12/2009 Var.

2,480 2,640 160 Advances due within one year 3,451 3,803 352

310 258 -52 Payables to pension and social security institutions 432 371 -61

1,045 915 -130 Other payables due within one year 1,455 1,318 -137

1,593 687 -906 Accrued liabilities 2,218 990 -1,228

880 686 -194 Deferred income 1,223 989 -234

6,308 5,186 -1,122 Total 8,779 7,471 -1,308

Tax liabilities (Note H1)

This item, totalling 243 thousand euros (348 thousand US dollars) at December 31, 2009 and 780 thousand euros

(1,078 thousand US dollars) at December 31, 2008, primarily includes the balance of income tax expense.

Equity

Issued capital (Note I1)

The fully paid-in issued capital amounts to 30,000 thousand euros (43,218 thousand US dollars) and consists of

30,000,000 ordinary shares with a par value of 1.00 euro each.

Legal reserve (Note L1)



As of December 31, 2009 the legal reserve amounts to 858 thousand euros (1,236 thousand US dollars) and

consists of portions of earnings of the Parent Company, Finaval SpA, amounting to 5% of annual profit (if made).

Currency translation reserve (Note M1)

As of December 31, 2009, changes to the currency translation reserve, amounting to 1,440 thousand euros

(2,724 thousand US dollars), derived from:

� translation of costs and revenues at exchange rates prevailing at the date of transactions, and of assets

and liabilities at closing rates;

� changes in the initial value of equity, due to application of different opening and closing exchange

rates.

Other reserves (Note N1)

Other reserves, amounting to 20,215 thousand euros (29,120 thousand US dollars) as of December 31, 2009,

primarily regard reserves formed from undistributed earnings.

Cash flow hedge reserve (Note O1)

As of December 31, 2009 this reserve reports a positive balance of 1,702 thousand euros (2,453 thousand US

dollars). It represents the negative fair value of derivative financial instruments used by the Group to hedge

interest rate risk and which qualify for application of hedge accounting. Details of these instruments are

provided in the section “Financial risk management” in these notes. A breakdown of the Group’s derivatives

as of December 31, 2009 is shown in the table in Note O.

Fair value reserve for available-for-sale financial assets (Note P1)

This reserve – a negative balance of 1,223 thousand euros (1,702 thousand US dollars) as of December 31, 2008

and a negative balance of 988 thousand euros (1,423 thousand US dollars) as of December 31, 2009 –

represents the fair value adjustment, after deducting the estimated tax charge, to the value the Parent

Company’s shareholding in Banca Popolare dell’Emilia Romagna, based on the market price at the balance

sheet date. Changes in the fair value of these assets are accounted for through equity as they are financial

assets not held for sale or for trading, and therefore qualify as “Available-for-sale financial assets”.

Retained earnings/(accumulated losses) (Note Q1)

This item, amounting to 34,170 thousand euros (49,223 thousand US dollars) at December 31, 2009 and 17,190

thousand euros (23,922 thousand US dollars) at December 31, 2008, also includes the effect on equity

generated by the transition to IFRS.

Profit/(loss) for the year (Note R1)

This item reflects the Finaval Holding Group’s after-tax result for the period.



NOTES TO THE INCOME STATEMENT

This section consists of notes on the composition of and main changes in income statement items during the

period 2008-2009.

Moreover, in compliance with IFRS 5, individual income statement items are shown less components

attributable to discontinued operations regarding the LPG and Small Product segments. These amounts, net of

tax, are shown in “Profit/(loss) from discontinued operations”. In this respect, as explained in detail in the notes

on "Net revenue", during 2009 the Group began the process of withdrawing from the Small Product segment

and completed the process of terminating the LPG segment.

Net revenue (Note 1)

The Finaval Holding Group operates through four Business Units depending on the type of transport and/or

service product offered and the type of market served. The four Business Units are: Crude Oil and Products,

Logistics and Engineering. Engineering is under the Sofipart – Technip KTI sub-group, which is consolidated

using the equity method. The results of the Engineering Business Unit are, therefore, not included in the income

statement but are recognised through the change in the carrying amount of the sub-group's equity.

The vessels operating in the Product segment were larger ships used to serve the global market (Product MR)

and ships with reduced tonnage, which operated exclusively in the Mediterranean area carrying out what is

commonly known as cabotage (Small Product). In 2009 the Group began the process of exiting the Small

Product segment. As previously noted, in compliance with IFRS 5 the results of the Small Product segment for

2009 are shown, net of tax, in “Profit/(loss) from discontinued operations” at the end of the income statement.

This item also includes, for both comparative periods, the operating results of the LPG segment (from which the

Group completed its withdrawal in 2009 with redelivery of the last ship). Detailed income statements for the

discontinued operations of the Small Product and LPG segments are attached to these notes.

A breakdown of net revenue by operating segment for the two comparative periods is shown below:


31/12/2008 % 31/12/2009 % Net revenues 31/12/2008 % 31/12/2009 %

31,442 38.28% 28,313 38.41% Crude Oil 45,703 38.08% 39,065 38.31%

43,285 52.69% 37,714 51.17% Product 63,406 52.83% 52,180 51.18%

7,418 9.03% 7,682 10.42% Logistic 10,910 9.09% 10,715 10.51%

82,145 100.00% 73,709 100.00% Totale 120,019 100.00% 101,960 100.00%

Net revenue is down from 120,019 thousand US dollars in 2008 to 101,960 thousand US dollars in 2009, registering

a reduction of 18,059 thousand US dollars or 15.05%. The decrease is primarily due to a combination of the

following factors:

- the overall decline in the charter market registered during the year;

- the reduction in the Crude Oil segment primarily reflects:



• the redelivery of the Jag Lata in September 2009;

• the absence of the contributions of the Neverland Gold and Neverland Sky, which were operated

under spot contracts in 2008, even if only for a few months, following their purchase and prior to their

subsequent sale during the year.

Two further vessels, the Neverland Angel and Neverland Sun, were delivered to the Group in 2009 and

employed under time charter contracts, although the impact on revenue was limited with respect to the

spot market operations referred to above.

- The decrease in the Product segment is primarily due to a combination of the following factors:

- reclassification of revenue generated by the Small Product segment to discontinued operations;

- the use of 4 new ships with a DWT of 50,000 delivered between May and October 2008.

- The Logistic segment don’t have significant variations.

No breakdown by geographical area is reported as the Group operate in a single global market.

Port fees, bunkerage and other fees – transportation costs (Note 2)

The components of this item for 2009 and 2008 are shown below:


31/12/2008 % 31/12/2009 % Operating costs 31/12/2008 % 31/12/2009 %

9,047 11.01% 4,976 6.75% Bunker 13,325 11.10% 6,946 6.81%

1,245 1.52% 1,130 1.53% Commissions 1,803 1.50% 1,568 1.54%

6,337 7.71% 2,476 3.36% Port expenses 9,237 7.70% 3,410 3.34%

2,841 3.46% 4,137 5.61% Joint venture management 4,201 3.50% 5,960 5.85%

771 0.94% -288 -0.39% Changes in inventory 1,149 0.96% -423 -0.41%

5,664 6.90% 6,052 8.21% Logistic services 8,331 6.94% 8,441 8.28%

12,682 15.44% 5,022 6.81% Time Charter hire costs 18,595 15.49% 6,820 6.69%

7,434 9.05% 9,651 13.09% Seagoing personnel 10,844 9.04% 13,141 12.89%

2,458 2.99% 2,049 2.78% Maintenance 3,571 2.98% 2,866 2.81%

1,281 1.56% 1,187 1.61% Lubes 1,951 1.63% 1,577 1.55%

1,449 1.76% 2,373 3.22% Other shipping costs 2,132 1.78% 3,302 3.24%

1,894 2.31% 1,426 1.93% Insurance 2,821 2.35% 1,832 1.80%

1,224 1.49% 1,071 1.45% Other costs and expenses 1,782 1.48% 1,459 1.43%

0 0.00% -339 -0.46% Damage income 0 0.00% -495 -0.49%

54,327 66.13% 40,923 55.52% Total 79,742 66.44% 56,404 55.32%



Operating costs are down from 79,742 thousand US dollars in 2008 to 56,404 thousand US dollars in 2009,

registering a reduction of 23,338 thousand US dollars or 29.3%. The decrease is primarily due to:

− the cost of bunkerage and port fees, which have declined compared with the previous year as spot

market operations involved fewer, smaller sized ships.

− The decrease in hire costs that reflects reclassification of the expenses attributable to the Small Product

segment to discontinued operations and redelivery of the Jag Lata in September 2009.

− The decrease in maintenance and insurance costs is due to a reduction in the average age of the fleet,

following recent purchases and sales, and cost control initiatives.

The increase in seamen's salaries reflects the general rise in the cost of shipboard personnel over recent years.

The management fees paid to the provider of technical services have been reclassified to overheads (instead

of being accounted for in operating costs, as before). This is because the technical management of the fleet

is deemed to be and indirect cost. In confirmation of this assessment, technical management was insourced

via acquisition of a related business unit in early 2010. This activity was outsourced to Teknè Sam in 2008 and

2009. This operation, which has yet to be completed, was the subject of a feasibility study in late 2009. In order

ensure the comparability of amounts for the two periods, the comparative amounts for 2008 have also been

reclassified.

Finally, it should be noted that seamen's salaries are reported net of grants related to income, recognised

pursuant to Law no. 30 of 1998 in the form of tax credits on Group companies’ withholding taxes for IRPEF.

Contribution margin (Note 3)

The contribution margin, which expresses the capacity of segment management to cover overheads, rose

from 40,277 thousand US dollars in 2008 – representing a margin of 33.6% based on total revenue – to 45,556

thousand US dollars in 2009 - representing a margin of 44.7% based on total time charter revenue. This

represents an increase in absolute terms of 5,279 thousand US dollars. This increase is connected with the

reduced use of chartered ships and with the cost reduction policy.

Overheads (Note 4)


Value in Euro

Value in Usd

31/12/2008 % 31/12/2009 % Overhead costs 31/12/2008 % 31/12/2009 %

2,657 3.23% 2,794 3.79% Employees 4,011 3.34% 3,899 3.82%

5,558 6.77% 5,310 7.20% General expenses 7,982 6.65% 7,440 7.30%

437 0.53% 439 0.60% Rent and equipment 645 0.54% 608 0.60%

8,652 10.53% 8,543 11.59% Total 12,638 10.53% 11,947 11.72%



Overhead costs are down from 12,638 thousand US dollars in 2008 to 11,947 thousand US dollars in 2009,

registering a reduction of 691 thousand US dollars or 5.5%. The decrease primarily reflects cost control

initiatives.

Directors' fees amount to 591 thousand euros, whilst Statutory Auditors' fees total 77 thousand euros.

The amounts for overheads in both 2009 and 2008 reflect the impact of reclassification of the management

fees incurred for technical management of the Group’s ships, as described in greater detail in the note to

operating costs.

Other income/costs (Note 5)



31/12/2008 % 31/12/2009 % Other revenues/costs 31/12/2008 % 31/12/2009 %

437 0.53% 1,635 2.22% Other revenues 597 0.50% 2,234 2.19%

-407 -0.50% -731 -0.99% Other costs -562 -0.47% -1,018 -1.00%

30 0.03% 904 1.23% Total 35 0.03% 1,216 1.19%

“Other income/costs” in 2009 primarily include non-recurring gains and losses.

Profit/(loss) on the sale of non-current assets (Note 6)

The components of this item for 2009 and 2008 are shown below. Moreover, with reference to 2009, as no ships

were sold during the period the item reports zero balances.

Value in Euro

Value in Usd

31/12/2008 % 31/12/2009 % Profit/(loss) on the sale of non-

current assets 31/12/2008 % 31/12/2009 %

5,746 7.00% 0 0.00% Neverland Gold 8,979 7.48% 0 0.00%

7,687 9.36% 0 0.00% Neverland Sky 9,704 8.09% 0 0.00%

1,420 1.73% 0 0.00% Isola Rossa 2,134 1.78% 0 0.00%

1,528 1.86% 0 0.00% Isola Gialla 2,250 1.87% 0 0.00%

-2,144 -2.61% 0 0.00% Neverland Soul -3,179 -2.65% 0 0.00%

81 0.10% 0 0.00% Airplane 118 0.10% 0 0.00%

14,318 17.43% 0 0.00% Total 20,006 16.67% 0 0.00%

EBITDA (Note 7)

EBITDA is down from 47,680 thousand US dollars for 2008 to 34,825 thousand US dollars for 2009, registering a

reduction of 12,855 thousand US dollars. The decrease is primarily linked to the impact of sales of non current

assets in 2008 (20,006 thousand US dollars), of which none were made in 2009, partially offset by the following

increases in 2009:

- a higher contribution margin (5,279 thousand US dollars);



- a 691 thousand US dollar reduction in overheads;

- an improvement of 1,181 thousand US dollars in “Other income/costs”.

A breakdown of EBITDA by operating segment for the two comparative periods is shown below:


31/12/2008 % 31/12/2009 % EBITDA 31/12/2008 % 31/12/2009 %

17,718 21.57% 11,269 15.29% Crude Oil 24,586 20.49% 15,675 15.37%

14,804 18.02% 13,440 18.23% Product 21,624 18.02% 18,537 18.18%

912 1.11% 438 0.59% Logistic 1,352 1.13% 613 0.60%

80 0.10% 0 0.00% Air Cargo 118 0.10% 0 0.00%

33,514 40.80% 25,147 34.12% Totale 47,680 39.73% 34,825 34.15%

Note:

Notes:

(a) EBITDA is defined by the Directors of the Parent Company as the “operating margin”, which derives from the

consolidated income statement approved by the Board of Directors, before taking account of the depreciation and

amortisation of property, plant and equipment and intangible assets reported in the aforementioned consolidated

income statement.

EBITDA is not defined in terms of IFRS, and therefore it should not be considered as an alternative measure for assessing

the Group's operating performance. As the composition of EBITDA is not regulated by IFRS, the measurement criteria

applied by the Group may not be in line with those adopted by other operators and/or groups and therefore may not

be comparable.

Depreciation and amortisation (Note 8)



31/12/2008 % 31/12/2009 % Amortisation & depreciation 31/12/2008 % 31/12/2009 %

12,729 15.50% 17,266 23.42% Depreciation of fleet 18,503 15.42% 24,133 23.67%

-747 -0.91% -304 -0.41% Subsidies -1,127 -0.94% -438 -0.43%

315 0.38% 310 0.42% Depreciation of other

tangible assets 457 0.38% 434 0.43%

51 0.06% 14 0.02% Amortisation of intangible

assets 76 0.06% 20 0.02%

12,348 15.03% 17,286 23.45% Total 17,909 14.92% 24,149 23.68%

The net increase in depreciation of the fleet reflects the changes in the composition of the fleet referred to

above.

Depreciation and amortisation are translated from US dollars, the functional currency, into euros, the

presentation currency, at the average exchange rate for the period in the income statement, and at the

closing exchange rate in the balance sheet. Any exchange differences are taken to the foreign currency

translation reserve (IAS 21). The impact of this treatment are shown below.



Value in Euro

Amortisation & depreciation Usd Inc. Stat. Fin. Stat. Var.

Depreciation of fleet 24,133 17,266 16,752 -514

Subsidies -438 -304 -304 0

Depreciation of other tangible assets 434 310 302 -8

Amortisation of intangible assets 20 14 13 -1

Total 24,149 17,286 16,763 -523

Provisions for potential losses on current receivables (Note 9)

The write-down of receivables amounting to 281 thousand US dollars (202 thousand euros) at December 31,

2009 relates to the transport segment, as a result of agreeing to a customer's composition.

EBIT (Note 10)

EBIT is down from 29,766 thousand US dollars for 2008 to 10,395 thousand US dollars for 2009, registering a net

decrease of 19,371 thousand US dollars. This is due to the above performance of EBITDA, as well as higher

depreciation recorded in 2009 on the new ships that joined the fleet.

A breakdown of EBIT by operating segment for the two comparative periods is shown below:


31/12/2008 % 31/12/2009 % EBIT 31/12/2008 % 31/12/2009 %

14,510 17.66% 6,098 8.27% Crude Oil 19,892 16.57% 8,410 8.25%

5,672 6.90% 1,346 1.83% Product 8,430 7.02% 1,682 1.65%

900 1.10% 215 0.29% Logistic 1,325 1.10% 303 0.30%

81 0.10% 0 0.00% Air Cargo 119 0.10% 0 0.00%

21,163 25.76% 7,659 10.39% Total 29,766 24.80% 10,395 10.19%

Finance income/(costs) (Note 11)



31/12/2008 % 31/12/2009 %

Financial

Management 31/12/2008 % 31/12/2009 %

2,628 3.20% 4,082 5.54% Financial income 3,503 2.92% 5,140 5.04%

-11,838 -14.41% -9,521 -12.92%

Interest on mortgages, loans

and banks -15,667 -13.05% -12,881 -12.63%

1,848 2.25% 2,398 3.25%

Fair value of derivative instruments 2,125 1.77% 3,240 3.18%

3,663 4.46% -1,597 -2.17% Exchange Differences 3,907 3.26% -2,351 -2.31%

1,400 1.70% 2,621 3.56% Adjustments to

financial asset values 2,059 1.72% 3,656 3.59%

-2,299 -2.80% -2,017 -2.73% Total -4,073 -3.39% -3,196 -3.13%



The increase in “Finance income” primarily derives from the positive closing balances of exchange rate

derivative instruments as of December 31, 2008.

Net foreign exchange losses in 2009 primarily reflect the year-end translation of financial debt denominated in

euros, following the fall in the value of the US currency against the euro during the period.

The reduction in interest expense charged to the income statement in 2009, compared with the

corresponding figure for the previous year, reflects the decline in interest rates.

"Adjustments to financial assets" primarily relate to recognition of the shareholding in Sofipart Srl using the

equity method.

Profit/(loss) from continuing operations (Note 12)

The following table shows the Group’s current and deferred tax charges for the years ended December 31,

2009 and December 31, 2008:


31/12/2008 % 31/12/2009 % 31/12/2008 % 31/12/2009 %

18,864 22.96% 5,642 7.65% Profit before taxes 25,693 21.41% 7,199 7.06%

-592 -0.72% -111 -0.15% Income taxes -836 -0.70% -158 -0.16%

130 0.16% 70 0.09% Deferred tax charges 180 0.15% 98 0.10%

18,402 22.40% 5,601 7.60%

Net profit from continuing

operations 25,037 20.86% 7,139 7.00%

Changes in deferred tax assets and liabilities are shown below.

deferred tax (Euro/000) 2009

reversal deferred tax assets

- bring up to date of Receivables -25

- Ires Sales representatives expenses -2

- Irap Sales representatives expenses -6

Deferred tax

- loss 26

Total deferred tax assets -7

reversal deferred tax liability

- IresDeferred gains on disposals 54

- Ires Other net temporary differences 23

Total deferred tax liability 77

Totale deferred tax 70

Profit/(loss) from discontinued operations (Note 13)

Profit/(loss) from discontinued operations for the two comparative periods is as follows.


31/12/2008 % 31/12/2009 % Profit/(loss) from discontinued

operations 31/12/2008 % 31/12/2009 %

0 0.00% -1,731 -2.35% Small product 0 0.00% -2,434 -2.39%

1,034 1.26% -390 -0.53% Lpg 1,417 1.18% -508 -0.50%

1,034 0.86% -2,121 -2.08% Total 1,417 1.18% -2,942 -2.89%



In application of IFRS 5, the total after-tax profit/(loss) reported by the LPG and Small Product segments is

recorded on a single line of the income statement.

The following income statements show the results of discontinued operations, including, where applicable, the

related tax effects.

INCOME STATEMENT LPG

Value in usd Value in Euro

Net revenues 790 5,488 594 3,679

Port, bunker and commission expenses 10 -208 9 -139

TIME CHARTER EQUIVALENT EARNINGS 800 5,280 603 3,540

Hire charges -570 -3,019 -440 -2,028

Operating costs -530 -2,678 -396 -1,772

FLEET CONTRIBUTION MARGIN -300 -417 -233 -260

Overhead costs -97 0 -73 -3

Other revenues/costs 0 36 0 23

Result on disposal of vessel 0 0 0 0

EBITDA -397 -381 -306 -240

Amortisation & depreciation -111 -517 -84 -350

EBIT -508 -898 -390 -590

Net financial income (charges) 0 0 0 0

PRE-TAX RESULT -508 -898 -390 -590

Income taxes 0 0 0 0

Deferred tax charges 0 0 0 0

division net profit (loss) -508 -898 -390 -590



INCOME STATEMENT SMALL PRODUCT

Value in usd Value in Euro

31/12/2009 31/12/2008 31/12/2009 31/12/2008

Net revenues 6,372 0 4,564 0

Port, bunker and commission expenses -3,194 0 -2,269 0

TIME CHARTER EQUIVALENT EARNINGS 3,178 0 2,295 0

Hire charges -5,241 0 -3,757 0

Operating costs -45 0 -33 0

FLEET CONTRIBUTION MARGIN -2,108 0 -1,495 0

Overhead costs -71 0 -51 0

Other revenues/costs -153 0 -110 0

Result on disposal of vessel 0 0 0 0

EBITDA -2,332 0 -1,656 0

Amortisation & depreciation -2 0 -2 0

EBIT -2,334 0 -1,658 0

Net financial income (charges) -100 0 -73 0

PRE-TAX RESULT -2,434 0 -1,731 0

Income taxes 0 0 0 0

Deferred tax charges 0 0 0 0

division net profit (loss) -2,434 0 -1,731 0



FINANCIAL RISK MANAGEMENT

The Group has put in place a process for managing financial risk, which takes account of the specific areas of

business in which it operates and the strategies it intends to pursue.

Financial risk is covered by a specific risk management policy. This policy is designed to identify, evaluate and

hedge financial risks, and governs the use of derivative financial instruments when considered appropriate.

The Group's risk management policy is based on the following assumptions:

- the Group’s risk management policy aims to preserve the value of the Group's assets;

- risk management policies aim to take full advantage of so-called “natural hedges”, thereby minimising the

net exposure to financial risks without incurring the additional costs of hedging derivatives;

- hedging derivatives are entered into solely in the event of a specifically identified exposure to financial

risks;

- all the Group’s risk management activities are based on the principle of prudence;

- risk management policy is aimed at promptly identifying operational events and market developments

that might potentially have impacts on the income statement;

- all financial risk management initiatives are implemented within the limits approved by management;

- the staff with responsibility for implementing the risk management policy all have the necessary

professional qualifications and are authorised to operate solely within the limits defined in the risk

management policy itself (and any additional specific proxies).

Details of the Group’s derivative financial instruments are provided in “Note O” in the notes.

The Group’s activities expose it to the following financial risks:

- liquidity risk;

- credit risk;

- foreign exchange risk (euro/US dollar);

- interest rate risk.

Liquidity risk

In executing ordinary commercial transactions, the Group is exposed to liquidity risk deriving from a temporary

mismatch between cash inflows and outflows.

In order to ensure its ongoing ability to meet its financial obligations and respond to any unplanned business

opportunities or unforeseen cash outflows, the Group maintains a certain amount of committed credit

facilities.

Excess liquidity is temporarily invested in short-term (3/6 months) money market instruments.

The Group has adopted a liquidity plan as a means of measuring and managing liquidity risk. This enables it to

constantly plan its liquidity requirements.

The contractual maturity dates of financial assets and liabilities are shown in the table below:



In Usd thousands

Financial assets Amounts due

within 1 year Amounts due between

1 and 5 year Amounts due over 5

year Total at

31/12/2009

Other receivables and deposits - 2,784 500 3,284

Deferred tax assets 163 163

Trade receivables 11,866 11,866

Other receivables 2,314 2,314

Cash and cash equivalents 37,160 37,160

Derivative financial instruments 2,827 2,827

Tax assets 1,097 1,097

Total financial assets 55,427 2,784 500 58,711

Financial liabilities

Bank payables 75,629 156,089 150,087 381,805

Derivative financial instruments 3,243 3,243

Trade payables 18,109 18,109

Other payables 7,471 7,471

Tax liabilities 349 349

Total financial assets 104,801 156,089 150,087 410,977

Credit risk

In order to reduce its exposure to credit risk, the Group operates exclusively with highly creditworthy trading

partners at both national and international level.

For this reason, historically the Group has not had particular difficulties in collecting amounts receivable from its

customers.

Foreign exchange risk (euro/US dollar)

One of the characteristics of the shipping sector is that companies operate in a global market, in which a

significant proportion of ordinary commercial transactions, as well as almost all trading of ships and the related

financing, are settled in foreign currency (US dollars). On the other hand, overheads, a portion of the cost of

shipboard personnel and part of maintenance costs are settled in euros. Moreover, some medium-term loan

contracts have been drawn up in euros. As a result, the Group’s operating results and financial position are

partly influenced by movements in the euro/USD exchange rate.

In this economic context, and following a careful assessment of its degree of exposure to the risk of

movements in the euro/USD exchange rate and of the various solutions offered by the financial markets, the

Finaval Group has drawn up a hedging strategy, which involves the following:

- the execution of specific derivative contracts designed to hedge foreign exchange risk relating to its

medium/long-term debt denominated in US dollars. In particular, US dollar call options were finalised,

entailing exchange rate protection throughout the loan period which, until the barrier is reached, enabling

the Group to benefit from any weakness in the US dollar. If the euro/US dollar exchange rate reaches the

knock-in barrier, the Company is still hedged by the strike rate set by the option regarding the related

financial risk (so-called “strip of knock-in barrier options”);



- the use of “natural hedges” for ordinary commercial transactions, in that the risk linked to fluctuations in

the value of invoices issued in US dollars is offset by corresponding movements, in the opposite direction, in

the value of trade payables denominated in US dollars.

The impact of movements in the euro/USD exchange rate on the Group’s operating performance is almost

entirely reflected in EBITDA, taking into account that revenues and a significant proportion of costs are

normally denominated in US dollars and that only overheads, a portion of the cost of shipboard personnel and

part of maintenance costs are settled in euros. The impact on EBITDA tends to be offset at the level of after-tax

profit/(loss), as net finance income/(costs) more than compensate for movements that have an effect on

gross operating profit/(loss)(EBITDA).

Regarding the Company's exposure to exchange rate risk in terms of its impact on financial instruments, the

effects on the income statement and equity (assuming that other variables, especially interest rates, are

unchanged) are shown in the table below.

The tables report the closing balances in US dollars of financial assets and liabilities denominated in euros,

including assets and liabilities for which the exchange rate risk has been covered by derivative financial

instruments, as well as existing derivative instruments at year end.

No transactions entailing substantial amounts took place in currencies other than the euro.

It should be noted that following the Parent Company's adoption of the revenue taxation system based on

lump-sum determination of taxable income known as the “tonnage tax", the changes reported below do not

generate any significant tax effects.

Book value +10 notional -10 notional

In Usd thousands IS Effect NE Effect IS Effect NE Effect

Trade receivables 4,204 292 -292

Trade payables -7,690 -534 534

Other receivables and deposits 2,778 193 -193

Other receivables 1,538 107 -107

Other payables -1,870 -130 130

Cash and cash equivalents 4,491 312 -312

Bank payables -62,819 -4,361 4,361

Foreign exchange derivatives 200 -7,292 5,332

Total exposure -59,168 -11,413 0 9,453 0

Interest rate risk

The shipping sector is highly capital intensive and companies are thus obliged to make substantial recourse to

medium/long-term bank debt. Management of the Group’s finances is influenced by movements in both

European and US interest rates.

In view of this, the type and term of the hedges used are primarily chosen on the basis of expected interest

rate curve trends.

The minimum proportion of total medium/long-term financial debt hedged at Group level is set at 50%.



The interest rates applied to bank debt are primarily represented by Euribor and USD Libor for the reference

period.

The Group's exposure to interest rate risk is shown in the table below, based on the assumption that market risk

components (especially the USD/Euro exchange rate) are unchanged.

It should be noted that following the Parent Company's adoption of the revenue taxation system based on

lump-sum determination of taxable income known as the “tonnage tax", the changes reported below do not

generate any significant tax effects.

+100 basis point -100 basis point

In Usd thousands Book value IS Effect NE Effect IS Effect NE Effect

Cash and cash equivalents 37,160 492 -123

Loans and mortgages -381,804 -3,567 892

Cash flow hedges 2,453 366 -438 -91 110

Other interest rate derivatives -3,068 -752 188

Total exposure -345,259 -3,461 -438 866 110

Moreover, given that the Libor rate, which stood at 25 bps as of December 31, 2009, is the main reference

parameter, exposure to negative interest rate risk is covered by using a reduction of 25 bps, considering that a

movement large enough to bring the Libor rate into negative territory is unlikely.

The effect on the income statement of the above risk exposure analysis was calculated using average

carrying amounts for the period, as they were deemed more representative than year-end carrying amounts.

FINAVAL HOLDING SpA

Sole Shareholder

Roma: Via M. Bufalini, 8

ISSUED CAPITAL €30,000,000.00 fully paid-up

TAX CODE AND COMPANIES’ REGISTER NUMBER

AT THE COURT OF ROME: 01922160351 - ROME BUSINESS REGISTER NO. 1070911

A company that exercises control, management and coordination

Report of the Board of Statutory Auditors

on the consolidated financial statements

of FINAVAL HOLDING SpA for the year ended December 31, 2009

Dear Shareholders,

The consolidated financial statements of FINAVAL HOLDING SpA and its subsidiaries for the

year ended December 31, 2009, as made available to you, have been prepared pursuant to article 25

of Legislative Decree 127 of April 9, 1991. The consolidated financial statements report net profit

of 3 million, 181 thousand euros. They have been published within the legally required deadline,

together with the management report on operations.

As in the prior year, the Group's consolidated financial statements for the year ended December 31,

2009 have been prepared in compliance with the IAS/IFRS issued by the International Accounting

Standards Board and endorsed by the European Union.

The reason for this decision was that the subsidiary, Finaval SpA, which is by far the largest of the

Finaval Holding Group's consolidated companies, has exercised the option of adopting IAS/IFRS

for its own financial statements. The Board of Directors has explained its decision in the notes to

the financial statements, referring to the provisions of paragraph 9.3 of Italian Accounting Standard

17 regarding the necessity to apply uniform accounting standards in the preparation of consolidated

financial statements. The Board of Statutory Auditors concurs with this explanation.

From 2008, in accordance with the provisions of IAS 21, FINAVAL SpA adopted the US dollar as

its functional currency, given that this is the monetary unit of account in the principal economic

environment in which the Company operates. Given that it is not possible, under current Italian

legislation, to present consolidated financial statements using a currency other than the euro, the

consolidated financial statements are presented in euros, as the presentation currency. To this end,

as more fully explained in the notes to the financial statements, the Directors believe the US dollar

to be the functional currency for the following reasons:

- it is the currency that mainly influences sale prices of goods and services;

- it is the currency that mainly influences the cost of goods and services purchased, and labour

and material costs;

- it is the currency in which the Group’s investments in its principal assets are denominated.

Whilst the Board of Statutory Auditors is not responsible for expressing an audit opinion on the

consolidated financial statements, we confirm that the information provided by the Directors’ with

regard to identification of the principal economic environment is in line with the principal “primary

and secondary indicators” identified by the IASB (International Accounting Standards Board) for

the purposes of adopting a functional currency different from the presentation currency.

The audit carried out by the independent auditors, Deloitte & Touche SpA, confirmed that the

amounts reported in the financial statements are consistent with the underlying accounting records

of the Parent Company, with the separate and consolidated financial statements of the Parent

Company, and with the disclosures therein.

The financial statements provided to the Parent Company by its subsidiaries for the purposes of

preparing the consolidated financial statements, as prepared by the respective board of directors,

have been audited by the entities with responsibility for auditing each individual company and by

Deloitte & Touche SpA as part of its audit of the consolidated financial statements. The Board of

Statutory Auditors has not, therefore, audited these financial statements.

The management report on operations adequately describes the results of operations and financial

position of the Group, and its operating performance in 2009. It also contains adequate information

on related party transactions, on events after December 31, 2009 and on the outlook for 2010.

The independent auditors, Deloitte & Touche SpA, have submitted to us there report on the

consolidated financial statements, prepared pursuant to art. 41 of Legislative Decree 127/91. The

report states that the consolidated financial statements comply with International Financial

Reporting Standards and expresses a clean opinion on the consolidated financial statements,

attesting that they are in conformity with the related legislation.

Based on the above, we attest that the basis of presentation for the consolidated financial statements

and the management report on operations complies with the related legislation.

June 15, 2010

The Board of Statutory Auditors

Maria Altamura

Alessandra Carlino

Fabio Senese

INDEPENDENT AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

IN ACCORDANCE WITH ART. 2409-TER OF THE ITALIAN CIVIL CODE

(NOW ART. 14 OF LEGISLATIVE DECREE 39 OF JANUARY 27, 2010)

To the Shareholders of

Finaval Holding S.p.A.

1. We have audited the consolidated financial statements of Finaval Holding S.p.A. and its subsidiaries

(the Finaval Holding Group), which comprise the balance sheet, the income statement, the statement

of comprehensive income and changes in equity, and the cash flow statement for the year ended

December 31, 2009, and the related explanatory notes. Preparation of the financial statements in

accordance with the International Financial Reporting Standards adopted by the European Union is

the responsibility of the Directors of Finaval Holding S.p.A.. Our responsibility is to express an

opinion on these consolidated financial statements based on our audit.

2. We conducted our audit in accordance with generally accepted auditing standards. Those standards

require that we plan and perform the audit to obtain the necessary assurance about whether the

consolidated financial statements are free of material misstatement and, taken as a whole, are

presented fairly. An audit includes examining, on a test basis, evidence supporting the amounts and

disclosures in the consolidated financial statements. An audit also includes assessing the accounting

principles used and significant estimates made by the Directors. We believe that our audit provides a

reasonable basis for our opinion.

Our audit of the consolidated financial statements for the year ended December 31, 2009 was

conducted in accordance with the legislation in force during that financial year.

For our opinion on the consolidated financial statements of the prior year, presented for comparative

purposes, reference should be made to our report issued on June 12, 2009. The comparative prior

year amounts have been restated to reflect changes in the presentation of financial statements

introduced by IAS 1.

3. In our opinion, the consolidated financial statements of the Finaval Holding Group for the year ended

December 31, 2009 comply with the International Financial Reporting Standards adopted by the

European Union and give a true and fair view of the balance sheet, financial position and results of

operation and cash flows of Finaval Holding S.p.A. as at that date.

4. Preparation of the Directors’ report on operations in compliance with applicable legislation is the

responsibility of the Directors of Finaval Holding S.p.A.. Our responsibility is to express an opinion

on the consistency of the Directors’ report on operations with the financial statements, as required by

law. We have, therefore, carried out the procedures indicated in auditing principle no. 001 issued by

the Italian accounting profession. It is our opinion that the Directors’ report on operations is

consistent with the consolidated financial statements of the Finaval Holding Group for the year

ended December 31, 2009.

DELOITTE & TOUCHE S.p.A.

Fabio Pompei

Partner

Rome, Italy

June 15, 2010

Documents

Consolidated Financial statement Finaval Holding 2009 · TECHNIP KTI SpA is a process engineering company with more than thirty years’ experience in the design and construction